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First-Time Personal Loans With No Credit History: How To Get A Loan Without Credit

Miranda Crace9-minute read
UPDATED: February 14, 2024


Lenders use your credit score to determine whether you qualify for a personal loan, as well as your interest rates, loan amount and monthly payment. If you’re in need of a personal loan but have no credit history, you may have more options available than you assume. However, you’ll likely have to put some work into finding the right lender and type of loan for your situation.

To help, we’ve put together this guide on how to get a first-time personal loan with no credit history. Let’s walk through the process so you can understand your options.

Can You Get A Loan With No Credit?

Yes, it’s possible to obtain a personal or installment loan without a credit history. However, you may face a  higher interest rate and unfavorable loan terms, especially when applying for an unsecured loan.

With an unsecured loan, borrowers aren’t required to provide any type of collateral – such as a house, car or savings account – to secure the loan. Without this collateral to protect them, lenders instead use an individual’s credit history and financial status to assess their risk in lending you money. In turn, lenders will protect their risk by charging a borrower more in interest and offering stricter loan terms because the borrower doesn’t have strong creditworthiness.

However, having no credit history doesn’t prevent you from obtaining the financing you need. Most important is researching your options and working with a potential lender to provide them with alternative, promising metrics that can help them gauge their risk in lending to you.

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How To Get A Loan With No Credit

Typically, the personal loan application process involves a hard inquiry of your credit report, and a soft credit check – which won’t affect your credit score – to get prequalified. Although qualifying for a personal loan with no credit history won’t be easy, it’s possible. If you’re in an emergency, you may consider using one of the methods we’ll review next to increase your chances of approval when applying for a personal loan.

Consider A Secured Personal Loan

Most lenders offer unsecured personal loans, but some offer secured loans where you can put down collateral to demonstrate your creditworthiness. Staking collateral on your loan could make a lender more lenient in their credit requirements and qualify you for a lower interest rate. But if you default on the loan, you’ll lose whatever valuable possession you put down.

Look At Online Lenders

Some online lenders offer flexible credit requirements for borrowers without credit or an available co-signer. These lenders may look more closely at your income than credit history, or review your loan eligibility through alternative lending criteria.

Look into joining peer-to-peer (P2P) lending platforms, where you can connect with investors who may agree to approve you for your desired loan amount. Some notable P2P platforms include LendingClub and Upstart.

Work With Your Bank Or Credit Union

If you have an established bank or credit union that you work with, consider asking to meet with an advisor to see if they have any options suitable for you. Financial institutions like banks and credit unions can use information from your account, such as your spending habits and deposit frequencies, to assess your ability to qualify.

Find A Co-Signer

If you want to increase your odds of approval for a personal loan, consider using a co-signer. Having someone with strong credit added to the loan can also help you get a lower interest rate and better terms. You should only seek a co-signer if you’re confident in your ability to make your payments each month. Otherwise, you could cause damage to their credit score.

Rocket Loans℠ doesn’t currently offer the option to co-sign on loans.

Ask To Borrow From Family Members Or Friends

If you’re in an emergency situation and worried that you won’t qualify for traditional financing, consider asking family members and friends. If they’re willing to help you, you can treat this exchange like any other loan by drawing up an agreement that outlines your joint terms and conditions.

Apply For A Credit Builder Loan

Some lenders offer credit builder loans. Specifically designed to help people who don’t have any credit history, these small loans can help you prove your creditworthiness over time.

Credit builder loans apply your monthly payments to the principal and interest of the loan, then report these payments to the credit bureaus. You’ll only have access to your money once the loan is paid in full, however, so it may not be the best option if you’re in an emergency situation.

Tips For Comparing No-Credit Loans

Although no-credit loans may sound promising in times of need, knowing about hidden fees or unfavorable terms that come with them is important. You don’t want to risk using something that could damage your credit score rather than build it up.

Here are some general tips for avoiding predatory loan lenders.

  • Pay attention to the APR. Your annual percentage rate (APR) on a loan is the biggest tell of a loan’s affordability and what you’ll pay in interest. Lenders are legally required to disclose a loan’s APR, so beware of any lender who doesn’t.
  • Understand all additional fees. Most loans will charge origination fees or late fees, but some no-credit lenders will also charge rollover fees if you have to extend your repayment date.
  • Make sure a lender assesses your repayment ability. If not a soft credit pull, a lender should assess your ability to repay the loan by analyzing your bank account, income or alternative criteria. A lender who doesn’t evaluate this could be counting on you rolling your debt over or taking out another loan to cover the first.
  • Understand your repayment schedule. Know upfront when your full repayment is due, whether that’s two weeks out from approval, months or years. This can help you avoid late payments and know when you need a certain amount of money in your bank account for automatic withdrawals.
  • Research the lender’s reputation. Even if a loan offer has great rates and affordable fees, take the extra step of looking into the lender themselves. Ask around or look up online reviews of the lender to determine their credibility and make sure you’re not being taken advantage of.

No-Credit Loans To Avoid

While many options are available for getting a first-time no-credit-check loan, you should avoid these short-term predatory loans.

  • Payday loans: Because payday loans don’t require a credit check, they may entice borrowers without an established credit history. However, it’s important to know that these loans often come with an interest rate of 400% or higher and have an extremely short repayment term of around 2 weeks.
  • Pawn shop loans: When you use a pawn shop loan, you’re putting something of high value down as collateral on a small loan, like jewelry, autographed sports memorabilia and similar small valuables. Depending on the value of the item, you may be able to take out a small loan against this item, but you’ll typically face a fairly high interest rate and risk losing your valuable item.

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Reasons Why You Don’t Have A Credit Score

Your credit score could be nonexistent for multiple reasons. Having no credit score is also very different from having a low or “bad” credit score. A low credit score signals to lenders that you’re a higher risk because you’ve been unsuccessful in managing your finances or previous loans. When you have no credit history, this means no record of your financial history exists.

You may have no existing credit history because:

  • You’ve never had a credit account: If you’ve never opened a credit card or taken out any type of loan, the major credit bureaus won’t have anything to report on. This is most common with people just entering adulthood and who haven’t had much time to establish credit.
  • You haven't used credit within the past 2 years: Similarly, if you haven’t utilized any credit in the last 2 years, the bureaus won’t have any data to generate a score from. It’s important to keep your accounts active by using your credit cards every so often and continuing to make on-time payments.
  • You’re a recent immigrant: If you’ve recently immigrated to the U.S., you’ll unfortunately need to rebuild your credit from scratch even if you had a stellar credit score back home.

Whatever your reason for not having a credit score, you can take steps to build your credit up from zero.

How To Establish Credit If You Have No Credit History

If you’re able to wait on applying for financing or even if you find a loan you can qualify for, it’s critical that you continue to work on building your credit. You’re likely to face a credit check in the future when being approved for other loans or making a major purchase, such as a car or house purchase. When this time comes around, you’ll want to have a well-established credit history that proves your worth as a trustworthy borrower.

You can use various strategies to establish a credit history, including the following.

Become An Authorized User

When you become an authorized user on someone else’s credit card account, you can use it for purchases and pay it off each month as you would your own card. With this strategy, you’ll want to make sure the cardholder has a strong financial track record with their account and doesn’t carry a high balance.

It’s also important that you stay on top of your payments since the credit card holder is ultimately responsible for all charges on the account.

Apply For A Credit Card

You may be able to qualify for your own credit card in the following forms.

  • Secured credit card: With a secured credit card, you’ll need to put a refundable security deposit down when applying. You’ll charge purchases on this card up to the amount you put down as the security deposit.
  • Student credit card: Student credit cards are designed to help students new to the world of credit begin laying the foundation for a successful financial future. By establishing credit early on, you can help your future self qualify for better rates and terms on a mortgage, a car loan or loans for other larger purchases.

Credit cards and personal loans differ greatly in rates and terms, so make sure you know what you’re signing up for.

Continue To Monitor Your Score

Even after you’ve built strong credit, you’ll want to routinely check your credit score over time. You can request your free credit report through the major credit bureaus or a credit monitoring service. With this report, you’ll be able to see if your efforts to build credit are working and identify any errors as well as areas of your credit score you can focus on improving. After you begin building credit, it will take around 6 months to generate a credit score.

Should You Wait To Apply For A Personal Loan?

Borrowers may want a personal loan for debt consolidation, or any variety of personal loan uses.

If you’re in a position where you can wait to apply for financing and instead focus on building your credit over time, you should consider doing so. People with a good credit score and a lengthy financial history can qualify for personal loans with a lower interest rate and more favorable loan terms.

The minimum credit score required for a personal loan will vary from lender to lender, but for good interest rates and loan terms you’ll generally need a score of 650 or higher. With a lower score, you may not qualify for a personal loan. Some lenders may be more flexible with their credit score requirement, depending on other factors, but it’s not guaranteed.

FAQs About Loans For No Credit History

Have a more specific question about getting a loan with no credit? See if we’ve answered it below.

How can I get approved for a personal loan with no credit?

You can attempt to get a loan by talking with the bank or credit union you’ve been working with about any kind of deals they could offer an established member. Other viable options include having a co-signer, using a credit builder loan or borrowing from friends or family members.

How can I get a car loan with no credit?

Getting approved for a car loan with no credit is similar to getting a personal loan – and a personal loan can sometimes even be used as an auto loan. With car loans, though, you have two additional options: dealer financing and making a bigger down payment.

If you finance through the dealer, you could qualify for special loan offers meant for customers with a low credit score or no credit score. If you can afford it, making a bigger down payment upfront could also convince a dealer you’re good for the money.

How can I get a quick loan with no credit check?

You could acquire a quick loan like a payday, pawn shop or car title loan without a credit check, but these types of loans come with incredibly high rates and short repayment periods, so you should avoid them.

How long it takes to get a personal loan can vary, but if you’re able to qualify without credit you could receive the loan in as little as 1 business day. In certain cases, you could receive your loan the same day you’re approved.1

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Final Thoughts

Getting a first-time personal loan with no credit history is tough but not impossible. Whether you find a lender that’s willing to work with you or you take the time to wait and build credit, it’s important to continue practicing good financial habits. Monitoring your credit report and making on-time payments toward your loan will help you get the score you need to qualify for favorable loan options in the future.

Once you’ve built up a strong credit history, start the personal loan process with Rocket Loans to find the loan that fits your needs.

1Sameday funding is available for clients completing the loan process and signing the Promissory Note by 1:00 p.m. ET on a business day. Also note, the ACH credit will be submitted to your bank the same business day. This may result in same day funding, but results may vary, and your bank may have rules that limit our ability to credit your account. We are not responsible for delays that may occur due to an incorrect routing number, an incorrect account number or errors of your financial institution.

Miranda Crace

Miranda Crace is a Senior Section Editor for the Rocket Companies, bringing a wealth of knowledge about mortgages, personal finance, real estate, and personal loans for over 10 years.