Do you ever wonder how you can start getting loans with no credit history? Every borrower in the world began without a credit history and grew to a more frequent borrower with a pile of credit histories.
And you are not exceptional. However, in most cases, lenders want to prove that you can repay the loan, and they do that by checking your previous credit history.
You will need a small loan at some point in life, and there is nothing wrong with that. Unfortunately, emergencies often occur, and you may find yourself on a hard rock if you don’t have some savings. However, getting a small loan is always an option to help you solve your emergency on time.
But where did the other borrowers with massive credit histories start? That’s the reason we are here, so keep reading.
Before I tell you how to get a small loan with no credit, let me tell you why you might not have a credit history in the first place.
Why you don’t have a credit history
- You could be new to borrowing. You cannot have a credit history while you have never borrowed money before.
- You are a new resident of a particular country. Migrating to a different country can cost you your credit history. You could be having a very excellent credit score while at home, but that becomes void when you are in a new country or state.
- Your credit has been dormant for the last two years. This is because the credit bureaus keep your credit history for at most two years, so if you have no recent borrowing history, you will end up with no credit history after the two years.
How do you get a small loan with no credit history?
1. Apply for payday loans
Payday loan lenders do not conduct credit checks while deciding whether to provide you with a loan or not. Instead, they largely depend on your paycheck to determine what amount to give you. As the name portrays, you will repay a payday loan during your next payday.
However, payday loans have very high interest rates starting from 390% APR, which is relatively high. But you can consider it if you have no other options.
2. Use collateral
Every lender out there will appreciate that you are willing to provide collateral in exchange for a small loan. Once the lender proves that you are the owner of the asset you provide, it’s easier to get a loan without credit.
3. Apply for a small amount of loan
There is always a chance to get some funding when you need a small amount of cash. For example, a lender might be willing to risk some money in exchange for a long-term partnership with a new client.
4. Consider your friends and relatives
Your close relatives won’t conduct a credit check if you borrow money from them. However, you should be more careful not to ruin your relationships if you don’t pay at the agreed time. So, you better commit yourself to a debt that you can repay.
5. Go for online direct lenders
Most online lenders do not conduct credit checks when giving out loans. Instead, they will require to prove your affordability by checking your bank transactions. Afterward, you will get the cash in your account within some hours.
6. Peer to peer lending
You will get this kind of lending mostly on online platforms. You will fill an application form on the site, and then they will match you with a potential lender. The process is easy since you don’t have to search for a lender to accept no credit check loans history. The platform will match you within minutes.
Final words
Now you know that it’s possible to get a small loan with no credit. What you should focus on is getting loans that will help you to build your credit score. However, that will be possible only if you repay the loans you borrow on the agreed time.
Source: Plato Data intelligence