If you are 18 years old with no credit history but want to take a loan then you have to find lenders that accept non-traditional credit histories like rent or utility payments. Other loan options for you are Payday Alternative Loans (PALs), secured loans, and 401(k) loans. Moreover, there are many online or storefront lenders available that offer loans without credit history an easy application process, and fast delivery of funds.
Key Takeaways
- You should keep in mind that, if you want to apply for a loan then you must have a good credit score
- If you have a poor or no credit score then you have to look for lenders that accept non-traditional credit histories
- If you won’t have a credit score then you can show savings or offer a deposit while applying for a loan
- A recommendation later can be a great help for you if you don’t have a credit score but want to apply for a loan
How To Get A Loan When You Are 18 With No Credit History
If you’re looking to get a loan with no credit history then here are some strategies that are worth trying. Let’s check them out!
1. Find Lenders That Accept Non-traditional Credit Histories
Without the credit history, there are many other ways available to prove to the bank that you are a trustworthy borrower. Some banks and many lenders accept alternative data to assess a borrower’s risk like the bank account activity, payment history towards rent, utilities, and other bills. In this type of situation, you have to contact the lender directly to apply for the loan. Talk with an authorized person and see what are their requirements. Try to negotiate a deal that suits your requirements.
2. Show Savings Or Offer Deposit
If the lenders don’t trust you or they don’t want to lend you money without proper credit history then you can show the lender you’re good at saving. If you can able to show the lenders that you have some deposit then the lenders might approve your loan application. Moreover, you can also show your bank statement with steady savings history. Moreover, you can offer a deposit against your loan application. This trick works great for people who don’t have a credit history.
3. Provide A Recommendation Later
If possible, then you can submit a recommendation later with your loan application. This type of document helps people with no credit history get approved for their loan application. This is because a recommendation from the employee stat that the security of your employment and it will help your loan application form.
4. Apply For A Lower Loan Or Secured Loan
If you apply for a big loan without a credit score then the lender won’t approve your loan application. Therefore, you should apply for a small loan and if possible then try to apply for a secured loan. Some examples of secured loans are –
1. Real estate
2. Vehicles
4. Stocks, bonds, or mutual funds
5. Insurance policies
6. Collectibles
7. Gold, silver, or other precious metals
5. Apply For A Payday Alternative Loan (PAL)
If you are a member of any credit union and require immediate cash then you can apply for Payday Alternative Loans (PALs). This type of loan is small and they are an alternative to high-cost payday loans. This type of loan has terms of one to six months and borrowed amounts can range from $200 to $1,000. The maximum interest rate for Payday Alternative Loans is 28%.
6. Add A Creditworthy Cosigner
If you are 18 with no credit history then you can try to add a creditworthy family member or friend as a cosigner to your loan application. This is a very effective way of approving a loan application without a credit history. However, you should keep in mind that if you miss payments or make late payments then the cosigner’s credit score will be damaged.
List Of Lenders Who Offer Loans To People With No Credit History
| Lender | Fixed Rates | Loan Amounts | Loan Terms (Years) |
| Avant | 9.95% – 35.99% APR | $2,000 to $35,000 | 2, 3, 4, 5 |
| LendingPoint | 15.49% – 35.99% APR | $2,000 to $36,500 | 2, 3, 4 |
| OneMainFinancial | 18.0% – 35.99% APR | $1,500 to $20,000 | 2, 3, 4, 5 |
| UniversalCredit | 8.93% – 35.93% APR | $1,000 to $50,000 | 3 to 5 years |
| Upstart | 6.46% – 35.99% APR | $1,000 to $50,0005 | 3 to 5 years |
Reasons Why You Don’t Have A Credit Score?
Not having a credit score doesn’t mean you have a bad credit score. There are many reasons you might not have a credit score. Moreover, not having a credit score also means the credit bureaus don’t have enough information about your credit history therefore they don’t assign a score for you. Here are some valid reasons why you might not have a credit score.
One of the main reasons, you might not have a credit score is, you have never used traditional credit accounts. Ther credit reports are made from your interactions with credit and debt. If you have never taken any type of loan and have never had a credit card then it is not a surprise that you don’t have any credit report. Moreover, if you haven’t used credit within the past 24 months then your credit score will show zero. Therefore, you need to remain active on your credit accounts to generate a score.
How To Compare The Lenders For Loan Without Credit History
If you don’t have a credit score then you will find it very difficult to find a competitive loan. However, you should compare all the available options to find the best lender for you. Below are some features that you should consider before choosing a lender. Let’s check them out!
Interest: Check the interest rate and other variables before choosing a loan for you. Find out the difference between other similar products and pick one that best suits you.
Loan Amounts: Different lenders offer various minimum and maximum loan amounts. Therefore, it is very important to check the loan amount. It will help you understand what you can afford to repay.
Fees: Various lenders charge different types of fees for the loans. You have to check the landers to find out the fees that you would be charged. Some common fees are establishment fees, monthly fees, early repayment fees, etc. Make sure what fees you have to pay so that you can minimize the cost.
Other Features: Check if the lenders offer other facilities that will come with your loan. Many lenders offer various facilities like extra repayments. This type of facility is an offset facility or extended warranty for your loan.
FAQs About Loans For 18 Years Old With No Credit History
Can I Get A Loan At 18 Years Old?
Yes, you can get a loan at 18 years old. However, getting a loan at 18 years old is typically hard compared to older people. Moreover, at 18 years old there are chances that you don’t have a credit score. So, if you want to get a loan at 18 years old then you should try to include a cosigner in your loan application. It will increase your chance of approving the loan application.
I Have No Credit History; Can I Still Get A Loan?
Yes, you can still get a loan if you don’t have any credit scores. You have to follow some alternative ways to get the approval of your loan application.
Can You Pass A Credit Check With No Credit History?
No, you won’t be able to pass a credit check with no credit history because you don’t have any credit to base a lending decision on. Therefore, you have to build some credit before you can pass a credit check.
What Would My Credit Score Be If I Have No Credit?
If you don’t have a credit score then you won’t have any credit report. Having no credit score doesn’t mean that you have zero credit. It either means you are inactive for a few months or you haven’t taken any credit. Therefore, if you don’t have any credit score then you don’t have a score at all.
References:
1. https://www.paydayuk.co.uk/18-year-old-loans/
2. https://www.finder.com/loans-for-18-year-olds
Last Updated on October 29, 2022 by Magalie D.
Magalie D. is a Diploma holder in Public Administration & Management from McGill University of Canada. She shares management tips here in MGTBlog when she has nothing to do and gets some free time after working in a multinational company at Toronto.
