Here’s how to get a loan even without credit
If you don’t have credit yet, you should make sure to start creating one as soon as possible. You should get a credit card or apply for a loan and make on-time payments on what you owe to get a great credit score. Yes, this is the best way to build your credit profile.
When you are just starting your journey towards this goal, it is normal to worry about not getting approved for a loan because you have no credit history. But you have to keep in mind that you can still qualify for a loan even without credit.
Just make sure you use the loan wisely and avoid having too much debt (here’s what you need to know about investing, budgeting, and reducing debt). So that you can get a loan despite your credit situation, take the time to read this article on how to get one.
Take out a personal loan online
An online personal loan is one of the preferred money borrowing options for people with no established credit history. Since you are working with an online lender, you may not go through a rigorous credit check when applying for a loan.
Typically, your online lender will only ask you for proof of income and a certificate of employment to get the loan.
Work with a co-signer
Working with a co-signer is another tactic for getting a loan even if you don’t have an existing credit profile yet. The person who will co-sign the loan with you can be your friend or relative (in fact, anyone you trust). But you have to keep in mind that your co-signer must have a stellar credit history to increase your chances of getting the loan.
The person who co-signs with you for the loan should also understand the responsibility of being a co-signer. In such a case where you miss payments or you default on the loan, your co-signer will have to pay the outstanding amount. If he does not continue to repay, his credit profile will receive bad grades.
If you plan to borrow money with the help of a co-signer, be sure to pay off the loan on time to avoid jeopardizing your co-signer’s credit profile.
Go to a lender who performs non-traditional credit checks
Traditional lenders and major lending institutions follow strict rules when checking a borrower’s credit profile. This is why not all loan seekers are approved for a loan due to such rigorous credit checks.
That’s why if you need to borrow money without having an established credit history, go to a non-traditional lender. Your credit score isn’t a big deal for non-traditional lenders, but you still need to show that you can afford the loan by providing your recent payslips, bank statements, and work certificate.
You can browse the Internet and compare loan offers from non-traditional lenders. There are direct lenders and loan networks that can give you a great credit check loan.
Apply for an alternative payday loan
Another credit building loan that you can get is an alternative payday loan. Members of credit unions can apply for this loan and receive a small loan amount with a repayment period of 1-6 months. It is a great loan to build your credit because it is much easier to repay than a regular payday loan.
Aside from the length and amount of the loan, alternative payday loans have affordable fees and rates as compared to regular payday loans. Perhaps the only problem with this type of loan is that you need to be a member of a registered credit union to qualify. Usually, a borrower has to be a member of the credit union for a few months to be eligible for this credit building loan.
Get a secured loan
Lenders who offer unsecured loans require that you have a good credit history if you want to borrow money from them. Your good credit score serves as proof that you are a good payer, so you won’t find it difficult to get such loans.
But what if you’re just starting to build your credit profile?
Well, if you are in this situation, don’t worry too much as there are secured loans that allow you to borrow money even without credit. As the name suggests, this type of loan requires you to have an asset that you can put as collateral against the money you owe. If you don’t repay the loan, your lender has the right to seize that asset in exchange for your non-payment.
You can offer your car, house, land, surety, mutual fund, stocks or a collector’s item as collateral for the loan. Since the loan is secured by collateral, you may be able to take advantage of an affordable interest rate.
To take with
If you want to build your credit profile, you should take note of the ways mentioned in this article to achieve your goal. Even without credit, you can get a secured loan, an alternative payday loan, a low rate credit check loan, or a personal loan online to start your credit building journey.