Each time you apply for a personal loan, a lender looks into your credit history to make sure you're not risky to lend to. Thus, having limited or no credit can make it difficult to qualify for unsecured loans. Luckily, there are plenty of alternatives to consider. At ASAP Finance, we offer no-credit-history loan options available online in a matter of minutes.
What Does Having No Credit Mean?
An individual with no credit is one who has no history of applying for loans or credit cards in their credit reports, so a lender has no information about their financial behavior. Such people are also called credit invisible or unscorable. Thus, they may be considered risky by a lender who approves loan applications.
Can You Get a Loan with No Credit History?
Sure, there are loans available to borrowers with a bad or no credit history. Such options are usually offered by alternative lenders. However, you need to be ready for less favorable loan terms. A lender may apply high interest rates or ask you to provide collateral or bring a cosigner.
Types of Loans for No Credit History
Here are the most commonly used loans among borrowers with no credit history.
Payday Loans
A payday loan with no credit checks allows you to borrow money based on your solvency, not your credit score. With their help, you can obtain between $100 and $1,000, depending on your state. The repayment is usually made in one lump sum within 2 to 4 weeks, and the due date is tied to your next paycheck. Payday loans also come with an annual percentage rate of over 400%. Therefore, they can overburden your budget and trap you in debt.
Installment Loans
A no credit check installment loan is similar to an unsecured personal loan but with lower amounts and shorter repayment terms. This option usually ranges from $1,000 to $5,000. As the repayment is made in fixed monthly payments within up to 24 months, the loan is more flexible and easier to handle. However, installment loan interest rates are still pretty high and can be anywhere from 16% to 100%. Additionally, a longer repayment period typically results in a higher overall loan cost.
Personal Loans
No credit check personal loans typically have amounts between $1,000 and $15,000, with some lenders offering up to $50,000 financing. The repayment terms are usually up to 60 months. Their interest rates are usually between 5.99% and 35.99%. However, favorable terms are usually available to borrowers with good and fair credit scores. Those with bad credit may be offered higher APRs, asked for extra guarantee, or even get denied.
Loans from Cash Advance Apps
Cash advance apps are fintech tools that allow people to access a portion of their already earned but not yet received money upfront. Some of them even offer interest-free options or charge a nominal membership fee. However, they usually have very small loan amounts that are limited to $300 or $500.
How to Get a Personal Loan with No Credit?
The process of getting a personal loan with no credit is quite simple when you apply from ASAP Finance. You only need to follow these simple steps:
Choose a loan type that meets your needs. Whether you need short-term or longer-term assistance, our lenders have options for you.
Fill out a simple online form. Our application process usually takes less than 5 minutes to complete. You only need to provide some basic personal and financial information.
Get an approval decision. A lender will review your data for eligibility and send you a response via email.
Sign a loan agreement. If approved, read your loan documents carefully to make sure they suit you. If everything is fine, e-sign the contract to accept the offer.
Get the money. Lenders usually transfer funds as soon as the next business day. Same-day funding may be possible for applicants approved before noon on weekdays.
Tips to Compare First-Time Loans with No Credit
Just like with any other loan options, first-time loans with no credit are not created equally. Shop around before settling on one, and pay attention to the following parameters:
Lender's requirements
Even if there's no minimum set for your credit score, other musts may still be applied. For example, a lender may ask you to demonstrate a steady income of a certain level or provide an additional guarantee. Make sure you can meet all the criteria before applying.
Interest rates
The lower your interest rate, the less you will have to overpay. Pre-qualify from several loan providers and compare their offers. Then, choose the cheapest option.
Origination fees
An origination fee is the cost lenders sometimes charge for processing your loan. This sum is usually deducted from your loan amount, meaning that you will get less money on hand than you expect. Choose a lender with the lowest possible origination fees, but keep in mind that it may result in a higher APR.
Repayment periods
Make sure you will be able to repay the loan comfortably but search for a golden means. Longer repayment terms come with lower monthly payments but also result in a higher total loan cost.
Lender's reputation
Find out what former customers think about the company you're going to borrow money from. Also, make sure the lender has the license and can legally operate in your state.
No-Credit-Check Loan Alternatives
If a no credit check loan doesn't seem the best choice, there are several options you can turn to. Here are a few smart alternatives to first-time loans:
- Secured credit cards. Unlike an unsecured credit card, a secured one requires an upfront deposit that also serves as your credit limit. Then, you can use it just like a regular card. On-time payments will increase your FICO score over time. Then, an issuer may upgrade your card to an unsecured version and refund the deposit to you;
- Payday alternative loans. Payday alternative loans (PALs) are options provided by credit unions. They come with amounts between $100 and $2,000 and have more extended repayment terms of up to 12 months. The best part of it is that an interest rate doesn't exceed 28%. However, you need to become a credit union member to request this loan;
- Joint loans. Borrowers with no credit can add a cosigner to their applications. This individual will be responsible for repaying the debt if you fail. This provides an additional guarantee to a lender and makes them less biased toward you. Choose a cosigner with a strong credit history and stable income to improve your chances of getting approved;
- Credit-builder loans. A credit-builder loan is an option that requires you to make payments before you receive loan proceeds. Each time you pay on time, a lender will report it to credit bureaus, making your credit score grow. The sum you pay minus interest will be placed into a savings account. The loan amount will become available to you only after the repayment period ends;
- Secured personal loans. Secured loans are borrowing options that require collateral, usually a car or a house. Such backing makes it possible to borrow money with low or no credit and get a relatively favorable interest rate. Just keep in mind that your property can be legally seized if you default;
- Family loans. Loans from your loved ones can be handy if you need money fast. They often come with no interest and can be adjusted to your unique situation. However, the amount is limited by your family members' financial capabilities.
How to Build a Strong Credit History from Scratch
A strong credit history makes your financial life simpler and opens up new possibilities. You can build credit over some time by following these tips:
Take out loans available to no-credit borrowers.
It may be a credit-builder loan, a secured credit card, or a secured loan. Just make sure the lender you work with reports your on-time payments to major credit bureaus.
Pay on time.
As your payment history makes up a significant part of your overall credit score, it's crucial to fulfill your debt and bill payment obligations without delays;
Become an authorized user.
Ask your friend or family member with good credit to add you to their account as an authorized user. This way, their responsible credit use will positively impact your credit score;
Maintain a low debt-to-income ratio.
Make sure the amount you pay each month for all your current debts doesn't exceed 43% of your monthly income;
Keep track of your credit utilization.
If you use a credit card, try not to get too close to its limit. It's recommended not to use more than 30% of the total revolving credit available to you.
How to Check Your Credit History?
There are several options to help you stay informed about your credit. First, you can access free copies of three credit reports online via AnnualCreditReport.com once a year. You can also request this data directly from each credit bureau.
Another option is to turn to a credit monitoring service. For example, Experian Boost can even let you add some of your on-time bill payments to your credit report. Just keep in mind that these payments will only improve your Experian credit score.
Finally, some banks and credit card issuers may provide free access to your credit report details via their applications. This is typically a great option to monitor your monthly updates.
Avoid Predatory No-Credit Loans
Although some no-credit loans may seem tempting due to their accessibility, they are often offered by predatory lenders. Such lenders use deceptive practices to get you trapped in debt. Before applying for a no-credit loan, make sure you deal with a reputable and trusted loan provider. No matter what lenders tell or promise, don't take out a loan unless you're confident you can repay it on schedule.
Why Choose ASAP Finance?
ASAP Finance is a trusted connecting service that partners with multiple reliable loan providers throughout the US. We stand for responsible lending and borrowing practices and put our customers first. Our core goal is to help you make informed financial choices. Our loans are accessible, fast, and safe. You're welcome to apply online and get the money you need by tomorrow, no matter your credit score.
FAQ
01
What Credit Score Do I Need for Personal Loans?
Personal loan lenders often require a borrower to have a good credit score, which is 670 or higher. However, there are bad credit personal loans that come with lower requirements or even don't set any minimums.
02
Where Can I Get a Loan with No Credit and No Cosigner?
At ASAP Finance, we can connect you with a lender who accepts no credit borrowers and doesn't require a cosigner. You just need to be an adult US resident with a stable income and an active bank account.
03
What Is the Best First-Time Loan?
The best first-time loan is the one that will help you establish credit while having relatively favorable terms. You can apply for a credit-builder loan, consider a secured loan or credit card, or apply for a loan with a cosigner.
04
What Is The Easiest Loan to Get Approved for?
A payday loan is typically the easiest loan to get. However, it has high interest rates and very short repayment terms.
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