Get Someone To Cosign For You
If you have no credit, one of the simplest ways to get a loan is to find a cosigner. The cosigner is essentially vouching for you and this will make it rather easy for you to secure a loan with almost any lender. You will essentially be piggy backing off of the good credit of someone else, making this a very valuable tool
While this is the easiest way to get a loan with no credit, there are some major complications. When cosigning a loan for someone, the cosigner is essentially agreeing to be responsible for your debt. That means if you default on the loan, the lender can come after your cosigner for the full amount.
This responsibility is a huge obligation and risk for the cosigner. For this reason, this option is most often used by a parent to secure credit for a child. It is not something that you would want to ask a friend to do for you, no matter how trusted the relationship.
Take Out A Secured Loan
A secured loan is one that is, as the name implies, secured by property. In most cases, this is the actual property that is being purchased with the loan money. A few examples of secured loans are auto and home loans. With this type of credit, if the borrower does not meet their obligations, the lender has the ability to seize the property to recoup expenses.
Secured loans are often easier to be approved for, even for those with no credit. This is particularly true if you bring a large down payment to the table. The more you pay down on the property, the more equity there will be. That makes it less likely that the lender will lose money if you default, so the more you can put down on your purchase, the better your odds.
Look Into Alternative Lenders
Alternative lenders, such as the ones we get you access to are much more likely to approve someone with no credit. The reason for this is simple. They offset the risk involved with “no credit” borrowers with higher loan interest and fees. They expect a certain amount of borrowers to default and the higher profit margin offsets this. So yes, your loan will be more expensive than what someone with good credit would pay, but if you need a loan badly, it may be an option.
With an online alternative lender, you can get a loan for 200 dollars up to 50,000 dollars. Smaller loans will be much easier to secure however, especially with no credit history.
Build A Little Credit
One last option, if you have the time, is to build a little credit before applying for a loan. While this might seem difficult, it is not as hard as you might think. There are several ways build a little credit that can make you eligible for a loan in a matter of months.
One way is to open a secured credit card. With a secured credit card, you put money down with a bank and this will be your credit limit. If you put down 400 dollars, you will have 400 dollars in credit. While this might sound like a silly concept, it is a proven way to build or even rebuild credit.
Another option is to obtain a credit card that is easier to qualify for. Examples of easy types of credit to get include department store credit cards and gas cards. While these have limited functionality, they will help you build history of responsible credit usage.
In Conclusion
If you have no credit and get denied a loan, do not give up hope. Handle your money and your financial responsibilities and you will eventually be able to qualify for the credit and the loan that you deserve. Good things come to those who wait patiently and building credit is a slow process.
