How to Get a Personal Loan With No Credit

Your options will be limited and expensive unless you have someone to help you, in the form of a co-applicant.

Written by Ben Luthi / September 26, 2022

Quick Bites

  • It's possible to get approved for a personal loan with decent terms if you have a cosigner or co-borrower.
  • Short-term options that don't require a credit check may be prohibitively expensive and predatory in nature.
  • Consider other ways to get the money you need without going into expensive debt.

If you're tight on cash, a personal loan can help you cover necessary expenses and more. And if you have no credit history, it can also help you establish your credit profile.

But obtaining a personal loan with no credit isn't necessarily easy, and unless you have someone to help you, it can be incredibly expensive. If you're wondering how to get a personal loan with no credit, here's what you need to know.

Inside this article

  1. Personal loans without credit
  2. Finding safe no-credit loans
  3. Pros, cons of no-credit loans
  4. Alternatives to no-credit loans
  5. Ways to build your credit
  6. Frequently asked questions

Can you get a personal loan with no credit?

It’s possible to obtain a personal loan without a credit score, but it may not be a good financial choice unless you have a cosigner or a co-borrower:

  • Cosigner: A cosigner is someone who agrees to repay the debt if you fail to make your payments. A cosigner with good or excellent credit can not only improve your odds of approval but also help you secure more attractive financing terms. However, they don't have any claim on the loan funds or anything you buy with them.[1]

  • Co-borrower: Like a cosigner, a co-borrower can lend their good credit history and help you get approved for the loan. They're also legally responsible for paying back the debt, just like you. However, they'll also have equal claim on the loan funds and anything you buy with them, so this option is best for situations where two people want to borrow money together.[1]

Note that not all personal lenders allow cosigners or co-borrowers, so you'll need to do some research to find ones that do. Examples include[1-5]:

  • LightStream

  • LendingClub

  • SoFi

  • OneMain Financial

  • Upgrade

If you don't know anyone who would be willing to be a cosigner or co-borrower, there are still options available. However, many of them charge exorbitant fees and have short repayment terms. Some of the options to avoid include:[6-10]

Loan typeAPRTypical repayment term
Payday loan400% or more14 days
Pawn shop loan200% or more30 days
Auto title loan300% or more30 days
Short-term personal loan36% or moreUp to 18 months

Note that pawn shop loans and auto title loans typically require collateral in the form of one of your personal belongings or the title to your vehicle, respectively. If you can't repay the loan, the loan provider may seize the asset you used to secure the loan. [7, 9]

Secured vs. Unsecured Loans: What Are the Differences?

Secured vs. Unsecured Loans: What Are the Differences?

Auto and home loans are naturally a form of secured debt—they’re secured by a car or house—but personal loans can be secured or unsecured.

Find out more

Where to find reputable no-credit loans

Can you get a loan with no credit that won't destroy your finances? Absolutely. While options are limited, it is possible to get a personal loan without a credit history. Here are some options to consider:

  • Credit-builder loans: If you don't necessarily need money right now, but you want to start building your credit, consider a credit-builder loan. Instead of giving you the money up front, credit-builder loan providers set the money aside in a savings account while you make payments, and it reports those payments to the credit bureaus. Once you've completed your final payment, you'll receive the loan funds.[11]

  • Payday alternative loans: These loans are offered by select credit unions. They're small-dollar loans that offer longer repayment terms (up to six months) and have an APR cap of 28%. That said, you need to have been a member of the credit union offering the loan for at least a month to qualify, and not all credit unions offer them.[12]

  • Secured personal loans: Some credit unions and banks may offer savings-secured loans that use money you already have to secure the loan funds. However, if you're looking to borrow money because you need cash, this loan might not be a possible option for you.[13]

Debt Consolidation with Bad Credit: What You Need to Know

Debt Consolidation with Bad Credit: What You Need to Know

If you have a low credit score, debt consolidation will be tricky. But it can be done with the right approach.

Find out more

Pros and cons of no-credit-check personal loans

Even if you avoid predatory no-credit loans, there are still both benefits and drawbacks to the loans that are available. Here's what to consider before you apply.

Pros

  • Easier access: With some of these options, you don't even need a cosigner or co-borrower to get approved.
  • Can help build credit: If you go with a lender that reports your payments to all three credit bureaus, you'll be able to use your new loan to build your credit history and avoid this dilemma again in the future.

Cons

  • They can be expensive: Even some of the more legitimate options can be expensive in terms of interest charges and monthly payments. If you're not careful, you may miss payments and do more harm than good to your credit file.
  • They may not meet your needs: If you need money now, a credit-builder loan or savings-secured loan won't do. And some other no-credit personal loan options may not have high enough loan limits to get you all of the money you need. And keep in mind that certain lenders won't report your payments to the credit bureaus at all.
  • You can get trapped: Some no-credit loans are so expensive that they can trap you in a vicious cycle of debt. In fact, it's very common for borrowers with payday loans, title loans and pawnshop loans to have to roll over their loan into a new one because they can't afford to pay it back in time, resulting in additional fees.[6, 9]

Alternatives to no-credit loans

Depending on your situation, there may be some alternatives to a personal loan available to you. Here's a handful to consider:

  • Family and friends: If you have a good enough relationship with family members or friends, you may be able to borrow money from them. Just be sure to have a structured repayment plan, as nonpayment or delayed payment could damage your relationship.

  • Cash advance apps: Money loaning apps can provide you with a small amount of cash—between $50 and $1,000, depending on the service—without a credit check or interest rate. However, some of these apps may charge monthly fees, fees to expedite funding and more, so watch out for those costs.[14]

  • Buy now, pay later services: If you're thinking about borrowing money to purchase something, a buy now, pay later (BNPL) service may be able to help. Retailers partner with BNPL providers, many of which allow you to pay off a purchase over the course of several weeks with no interest.[15]

How to Avoid Costly Mistakes When Using Buy Now Pay Later

How to Avoid Costly Mistakes When Using Buy Now Pay Later

Paying just a fraction of the purchase at checkout can be a helpful budget stretcher. But if you’re not careful it can make a mess of your financial life.

Find out more

It's important to keep in mind that while these options can help you in a pinch, they won't help you build your credit history. Also, there are added dangers if you use cash advance apps and BNPL services regularly.

"The danger of these services is that the convenience of the money often leads to consumers overextending themselves and defaulting on the loan," says Markia Brown, a certified financial education instructor at Money Plug.

Ways to build your credit from scratch

If you're looking for ways to build your credit quickly so that you can take out an unsecured personal loan by yourself, you're out of luck. While there are some things you can do to start building your credit score, you need to have a credit account open for at least six months to receive a FICO credit score.[16]

That said, here are some ways you can get started with building your credit score:

  • Apply for a credit-builder loan

  • Apply for a secured credit card

  • If you're a college student, apply for a student credit card

  • Get a cosigner or co-borrower, if possible

"You could also ask a family member with a credit card to add you to their account as an authorized user," says Brown. "If they have 100% on-time payment history and low reporting utilization, then it’ll help boost your credit profile."

How to Pick the Right Credit Card for Your Needs in 6 Simple Steps

How to Pick the Right Credit Card for Your Needs in 6 Simple Steps

Don’t just sign up for any old credit card offer you get in the mail. Here’s how to make sure you get the credit card with the most benefits for you.

Find out more

Remember, building credit from scratch can take time, but until then, consider some of the other options above if you need to take out a loan with no credit.

Frequently asked questions

How big of a loan can I get with no credit?

Depending on the lender and the type of loan, you may be able to qualify for as much as $1,000 or more.[10] If you have a cosigner or co-borrower, your loan options will be a lot more flexible.[1]

What is the easiest loan to get approved for?
How can I get a loan with no credit?
Article Sources
  1. "Getting a Personal Loan with Cosigner vs Co-borrower: What to Know," Lending Club, https://www.lendingclub.com/loans/resource-center/personal-loans-with-cosigner#cosigner-definition.
  2. "Loan Application," LightStream, https://www.lightstream.com/apply.
  3. Janet Schaaf, "Using a Co-borrower on a Joint Personal Loan," SoFi, April 8, 2022, https://www.sofi.com/learn/content/why-people-choose-a-joint-personal-loan/.
  4. "Apply for a loan," OneMain Financial, https://www.onemainfinancial.com/apply.
  5. "How do joint applications work?" Upgrade, https://upgrade.zendesk.com/hc/en-us/articles/115000320647-How-do-joint-applications-work-.
  6. "How Payday Loans Work," Payday Loan Information for Consumers, https://paydayloaninfo.org/how-payday-loans-work/.
  7. "Emergency Loans: How to Get a Personal Loan Fast," Baton Rouge Telco Federal Credit Union, https://www.brtelco.org/resources/blog/emergency-loans-how-to-get-a-personal-loan-fast/.
  8. "National Pawnbroker Week," National Pawnbrokers Association, https://www.nationalpawnbrokers.org/calendar-of-events/#!event/2020/12/6/national-pawnbroker-week.
  9. "What To Know About Payday and Car Title Loans," Federal Trade Commission, https://consumer.ftc.gov/articles/what-know-about-payday-and-car-title-loans.
  10. "Online loans designed for you," OppLoans, https://www.opploans.com/.
  11. "What Is a Credit-Builder Loan?" Capital One, https://www.capitalone.com/learn-grow/money-management/what-is-a-credit-builder-loan/.
  12. "Alternatives to Payday Loans," My Credit Union, https://www.mycreditunion.gov/life-events/consumer-loans/payday-loan-alternatives.
  13. "KeyBank Secured Personal Loan," KeyBank, https://www.key.com/personal/loans-lines/secured-personal-loan.html.
  14. "Get Cash Advances Up To $250 With No Interest," MoneyLion, https://www.moneylion.com/instacash.
  15. "What is a Buy Now, Pay Later (BNPL) loan?" Consumer Financial Protection Bureau, Dec. 2, 2021, https://www.consumerfinance.gov/ask-cfpb/what-is-a-buy-now-pay-later-bnpl-loan-en-2119/.
  16. "What are the minimum requirements for a FICO® Score?" myFICO, https://www.myfico.com/credit-education/faq/scores/fico-score-requirements.

About the Author

Ben Luthi

Ben Luthi

Ben has been writing about money since 2013. He's been on staff at NerdWallet as a credit card writer and for Student Loan Hero, where he covered student loans and other personal finance topics. Ben's work has appeared in U.S. News, The New York Times, Experian, FICO, Credit Karma, Bankrate and more

Full bio

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