How to Get a Personal Loan with No Credit History
Bad credit scores are considered 630 or below
You can get up to $40,000 in loans with Lending Club, but make sure you pay attention to the interest rates. You could get a low interest rate or you could end up paying % APR. One of the best perks to LendingClub is that they allow you to make extra payments outside of your monthly balances, allowing you to pay your loan off early.
Borrowers with bad credit can apply for personal loans from OppLoans. Though the interest rates will be really high, you can get access to the funds you need from OppLoans. Because individuals with bad credit are considered risky borrowers, interest rates can be as high as 199%.
You can also get personal loans approved from credit unions and banks. If you already have a bank account with a national bank, you can ask about their personal loan options. Your bank might choose to offer you a signature loan which essentially relies on your signature to prove that you can pay off your loan. Perks of choosing your own bank for a loan is that you might be able to avoid extra fees and get benefits. Just make sure the loan offers fit with your needs.
If you are in need of funds, for whatever reason, but don’t have a credit history, you can still get approved for a starter loan. You can either use a co-signer, apply for a personal loan with no credit check required, or apply for an unsecured personal loan.
If it is your first time building your credit history, you should do your best to pay off your balances or payments every month and ensure that you are paying on time. If you keep a low or no balance and you maintain automatic payments then you can quickly build up your credit which will inevitably give you easier access to loan options.
Optional Ways to Improve Your Credit Score
According to Talaat and Tai McNeely, co-founders of His and Her Money, “Financial freedom is not going to happen overnight. You didn’t get into financial bondage overnight, and you’re not going to achieve financial freedom overnight either. But you can achieve it if you stay consistent.”
Consistency can help you build your credit history and improve your credit score. The are many ways to build credit. You can apply for a personal loan and consolidate your debt and you can have your loan provider focus on credit reporting so the three credit bureaus are updating your history.
- Pay all of your bills and payments on time. This includes your electrical bill, your cell phone payment, your credit card balance, and your personal loan payment. Schedule these payments so you never miss them.
- Keep your balances low or eliminate them completely. If you have credit cards, you want to make sure that you are paying off your balance or keeping your balances low. The best way to do this is to pay more than the minimum balance and ensure that your balance is less than 30% of your credit limit.
- Monitor your credit score. Avoid hard pulls, when possible. Hard pulls are often made by employers, credit card lenders, or loan providers. When you close a credit card account, for example, it can impact your credit score so it is better to just leave it open even if you aren’t using it. Soft pulls don’t impact your score. You have the right to a free credit report once a year but some providers offer more.