How to Get a Personal Loan With No Credit
In life, certain large expenses can come your way from time to time. And when that happens, you may not always want to pay for those costs out of pocket. When these situations arise, it's often useful to be able to get a loan to help you cover those costs.
It's well known that a strong credit history makes it easier to take out a loan. But what happens if you don't have an established credit history? You may be wondering how to get a loan with no credit. Fortunately, even if you have a minimal credit history, you still have options.
One of the best options available is a personal loan. Let's take a closer look to see why they can be a great solution for borrowers with little or no credit history.
What Is a Personal Loan?
Personal loans work differently than other loans or credit cards. A personal loan delivers a one-time payment of cash to borrowers. This amount is then paid back plus interest in regular, monthly installments over the lifetime of the loan, also known as its term.
Personal loans can start as small as a couple of thousand dollars. However, they can range up to roughly $50,000. But, in general, the typical loan is expected to be less than $10,000.
Uses for a Personal Loan
Unlike a home loan or a car loan, a personal loan isn't earmarked for any specific purpose. They can be used for a number of different reasons! You have the flexibility to use the funds from the loan in the way that most benefits your life circumstances at the time.
And the events don't always need to be unexpected. They could be wonderful occasions that you've been planning for some time. You may need to cover costs for an upcoming wedding. Or you want to finally take that vacation you've been dreaming about for years. Whatever the reason, your personal loan can help you accomplish your goals.
How to Get a Personal Loan With No Credit
Many people don't think about taking advantage of personal loans because they don't think they have the credit history to qualify for a loan. It’s true that having a long history or good credit does make it easier to secure a loan and get the lowest rates and best terms. But that doesn't mean people with no credit history are out of options.
Fortunately, many credit unions allow borrowers to get approved for personal loans by using a couple of different methods.
Use a Co-Signer
A co-signer is someone who takes on the responsibility of paying back your loan if you do not. When you use a co-signer, they sign the loan with you, and you benefit from their credit history. This is typically a parent, relative, or close friend — someone who knows you well and has confidence that you will be able to pay back the loan.
Apply for a Secured Loan
Many borrowers are in good financial shape and have solid savings — they just don't have a credit history. For these borrowers, a secured loan is a wonderful option. With a secured loan, you can borrow against money that is already in your savings or certificate account. OUCU secured loans offer:
Rate is the savings/certificate rate plus 3% annual percentage rate (APR)*
Between $1,000 and $25,000 available for borrowing
Up to 60 months to repay the balance
Build Credit With a Secured Loan
One of the big benefits you get from a secured personal loan is that you can build credit while you're paying back the loan.
Typically, you build credit by applying for credit cards or getting other loans, then you pay them back on time. As you continue to make on-time payments on your accounts and keep them in good standing, you build your credit history.
You can do the same thing with a secured loan. When you take out a secured loan in your name, all you have to do is make sure to make your payment each month. By doing that, you build your credit history, which increases your creditworthiness and makes it easier for you to take out another loan in the future.
Small Personal Loans With OUCU Financial
When you decide you need some extra funds, OUCU Financial is here to help. With our myriad of options for personal loans, you can get the capital you need when you need it and use it in the way that makes the most sense for you. You may even build your credit along the way!
Now that you know how to get a personal loan with no credit, you may be wondering about the different ways you can use a personal loan. We've compiled a list of ten common personal loan uses.
*Minimum term: 12 months, Maximum term: 60 months. Interest rate range: rate is 3% + the dividend rate on the deposit account. Deposits must be in a fixed rate account like S1 or certificate. Funds cannot be in the Money Max account. If the secured funds are in a savings account earning .05% Annual Percentage Yield, the loan rate would be 3.05% APR. The payment on a $5000 loan would be $89.97 by using the $18.00 per $1000 at a non-variable interest rate of 3.05% APR with a 60 month term and no origination fee. Late fee: If you make a payment 10 days or more after the due date, you may be charged 5% of the monthly payment amount.
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