Today, having a good credit score is less of a suggestion and more of a mandate. The fact remains that if you have a good credit rating, then more opportunities will open up and you can easily access financing. But what do you do if you have a bad credit history or no credit history at all? You are left wondering how you can get a loan with no credit history at all.
Although it can be challenging for most lenders to approve you if you don’t have a credit history, all isn’t lost since you can still apply and get approved for a no credit check loan. You still have numerous options when it comes to getting a personal loan. Here is how you can get a loan without a credit history.
â¨Pursue Financing from a Credit Union
Typically, a traditional bank or a major lender can easily deny you a loan if you don’t have a credit history but credit unions are always more open to working with clients with poor or no credit history at all. Credit unions are run by its members are nonprofit based organizations that tend to be smaller in scale. Since they primarily rely on their members to keep their business strong, you may be able to get even an auto loan from a credit union when you are declined by a bank or another lender. In fact, most credit unions mostly offer bonus incentives to all first-time loan applicants.
â¨Get a Personal Loan from a Family Relative or a Close Friend
If you have a close friend or family relative who is financially stable, you might be able to get a personal loan from that individual, especially if he/she knows how responsible you are with money. However, you need to treat a loan from a friend or family member as a debt that needs to be repaid on time to avoid straining your relationship later on. Although most financial experts advise against borrowing money from family and friends, you can do it as long as you have a genuine concern and you are sure that you will repay the loan on time.
â¨Get a Peer to Peer Loan
Several programs are available that can help you to get a personal loan from another person instead of obtaining it from a financial institution. Sometimes it may be challenging to obtain a P2P personal loan without proving that you are responsible with your cash. In this case, you should prepare to plead your situation.
Obtaining a P2P loan can only be done through peer to peer services where borrowers register and post a loan listing through an online platform. The online platform allows you to sign up and describe the type of loan, the amount and the reason as to why you need the money. Lenders can now see your information and determine whether it meets their criteria or not. There is no guarantee that you will receive the loan.
â¨Seek Out a Cosigner
This is done by requesting someone who has a good credit history and score to co-sign a loan which increases your chances of obtaining a personal loan. Having a cosigner on your side helps you to obtain a loan depending on their credit status. The cosigner can be your friend, relative or someone else that is closer to you. However, the major challenge with cosigned loans is finding someone who is willing to become your cosigner. Keep in mind that it is the cosigner who will pay the loan in case you default.