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Trying to get a personal loan can be difficult without a credit history or co-signer. Without either, lenders have limited information to determine whether or not you can repay a loan.
Yet, there may be other ways to secure the funding you need, such as a secured loan or applying with a lender that uses an alternative lending model. With limited credit, you may be offered loans with high interest rates, so compare options from multiple lenders before you accept a loan.
Ways To Get a Personal Loan With No Credit History or Co-signer
Having no credit history or co-signer can make it difficult to qualify for an unsecured personal loan. An unsecured loan doesn’t require collateral, so most lenders require good credit or a creditworthy co-signer as reassurance that you’ll repay your loan.
If you can’t provide either, consider these four alternative options.
1. Secured Loans
You may be able to qualify for a secured loan, which is backed by collateral such as your savings, vehicle or another asset. Lenders often offer more flexible credit or co-signer requirements for these loans because of the collateral.
If you fail to repay a secured loan, the lender can take possession of the collateral and use it to recoup its losses, making secured loans a risky option as a borrower.
Banks, credit unions and online lenders all offer secured personal loans, giving you various options to consider.
2. Online Personal Loans
Online lenders can be another option if you have no credit history or co-signer as some offer flexible qualification requirements. Some of these lenders offer the best personal loans and emergency loans for bad credit.
Oportun, for example, is an online lender that will review your income and other information when you apply for a loan, rather than relying heavily on your credit. Upstart, another online lender, may work with borrowers who don’t have enough history to generate a credit report.
By applying with lenders that use alternative lending criteria to evaluate loan applications rather than requiring good or excellent credit, you may be able to find a personal loan with no credit history and no co-signer.
3. Credit Union Loans
Credit unions may also be able to provide personal loans if you have no co-signer or credit history. Some credit unions also offer payday alternative loans (PAL), which have flexible credit requirements. You can borrow up to $2,000 with repayment terms as long as one year, depending on the type of PAL.
Keep in mind that most credit unions have membership requirements. You may need to live in a certain area, work for an eligible employer or belong to a qualifying organization to join and borrow money.
4. Payday Loans
Payday loans are often available to borrowers with no credit history or co-signer, but they can be predatory. These loans can have exorbitant fees, sometimes equivalent to annual percentage rates (APRs) as high as 400%.
You’re typically required to repay a payday loan on your next pay date, which can be difficult with the fees. If you miss the repayment date, you can end up paying back more than you borrowed.
Since payday loans can become expensive, they can trap borrowers in a cycle of debt that’s hard to escape. On top of that, you can also damage your credit.
In the worst-case scenario, you might also encounter a loan scam that promises no-credit-check loans in an attempt to steal your money or identity. Make sure to research that a lender is reputable before borrowing, especially if it’s offering no-credit loans.
Most experts recommend borrowing a loan with an interest rate no higher than 36%. If you’re looking at an offer with a rate higher than 36%, be sure you can afford to repay it on time. A personal loan calculator can help you understand the payments you’ll make.
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