Are you in need of a loan but have no credit history? Believe it or not, there are millions more like you. According to the Consumer Financial Protection Bureau, nearly 20% of Americans have no credit or unscorable credit.
But if you need a credit history to get a loan in the first place, how can you establish good credit? For that, you’ll need to get a personal loan with no credit check required. Yes — they do exist.
And there are more options than you might think. Get the cash you need before it’s too late. Here are a handful of ways you can get loans with no credit check.
1. Speak to a Bank in Person
When you have no credit, some banks are open to alternative financial markers. Rather than checking your credit history, they may be willing to look at your income, job, or equity instead. You might not have proof of paying debts, but these markers tell the potential lender that you’re capable of repaying them.
Make sure you’re prepared if you take this route. You’ll want to bring a variety of documents to prove you’re worthy of a credit line. These might include pay stubs, bank statements, and your employment history.
2. Use a Lender With No Credit Check
Some lenders specialize in personal loans with no credit check. While it may seem that loan services don’t exist for people with no credit history, that’s not the case. These lenders tend to be smaller, more obscure banks.
Beware that some of these lenders may have high rates and unfair terms. Be sure you check the customer reviews of the potential lender and take care to read the paperwork before signing off on anything.
This website has more information and specializes in no credit check loans.
3. Try a Credit Union
Credit unions are more flexible than traditional banks and typically offer better deals. In fact, unions have an alternative loan program that offers a small payout with a generous payback period. It’s a good choice for people with no credit history.
However, it can be difficult to become a member of a credit union. Also, credit unions don’t always report these loans to all the credit agencies, which means your credit might not improve.
4. Borrow From Family
If you need a quick loan and aren’t concerned about building credit, you can always consider asking family and friends. Not only is there no credit check, but your family may be willing to offer the loan without interest. Not a bad deal.
At the same time, you probably know someone who has been burned by a family or friend after loaning money away. A loan — even if you pay it back on time — can irreparably damage a relationship. Nobody likes lending money away for free.
For the safest family loan possible, make it a formal transaction and take it down in writing. This will provide a clear incentive for you to pay back the loan, as well as give your friend or family member some peace of mind in the form of a written contract.
5. Apply With a Cosigner
There’s no credit check if you apply for a personal loan with a cosigner. Instead, they’ll look at your cosigner’s credit history. A cosigner is tacked onto the loan and will be responsible for any debt that you neglect to pay.
This gives lenders confidence that they’ll have their money and interest returned.
As an alternative to getting a personal loan with a cosigner, you can also ask to become an authorized user on someone’s credit card. You’ll get your own card and can enjoy the benefits of the owner’s credit line.
6. Avoid Payday and Car Title Loans
When most people are in need of a sudden loan, they think of payday loans. On the surface, there’s a lot to like. There’s no credit check and the service is fast and convenient.
But those are the only positives. Payday loans are predatory with astronomical interest rates and brief pay periods. If anything goes wrong and you cannot make the payment, you’ll be looking at a debt spiral that could cost you thousands of dollars or more.
Even a normal loan can become a massive burden. Make sure you know which mistakes to avoid when you get a personal loan.
A car title loan is a similar beast, but your car title is used as collateral. This means it could be repossessed if you can’t make your payment.
Payday loans should only be considered as a last resort, if you know for certain you can pay it back without issue.
7. Build Your Credit First
Don’t need a loan right away? This is the perfect opportunity to build your credit so you’ll have better rates when you need to borrow money. And thankfully, you have several options.
The most popular is to apply for a secured credit card. To open one, you pay a small fee, which becomes your credit limit. By using this credit card over time — and promptly paying it off — you’ll begin the foundations of a strong credit history.
Plus, a secured credit card may have a large enough credit line that you may not even need a loan.
Stay on Top of Your Financial Health
Any of these options will get you a personal loan with no credit check. Consider your personal needs, like how fast you need the loan and if you’d like to build a credit history. With this in mind, it should be easy to choose the option best for you.