Credit Repair

Is It Possible To Obtain A Personal Loan With No Credit History?

It is difficult to obtain a personal loan with no credit history, but it is not something impossible. If you follow the right approach in the right direction, you can definitely qualify for such a loan even if you do not meet the credit standards required for such lending programs. When you are young and just starting off financially, you obviously cannot have a readymade credit history, but it does not mean that you cannot obtain credit. Following are some tips and suggestions, which if you follow thoroughly can help you become eligible for a good deal in personal loan.

Compile All Your Personal Information And Financial Documents In A File

In order to obtain a personal loan with no credit history, the first thing you have to do is to gather all your personal information and financial documents in a file. The idea is to keep yourself organized while you are applying for a personal loan to different banks and financial institutions. Make sure you have the past tax returns and pay stubs for the last few months in this file.

Obtain Your Credit Report

Even if you no or very little credit history in your name, there must e a credit report in your name. You can check the same by visiting the official website of the three major credit bureaus. You just have to enter some basic details, such as your name, your current address, and your social security number. It is also important for you to keep in mind that every citizen of the United States of America is entitled for at least one free credit report every year. Look at the entries on your credit report. If there are no entries out there, you can simply keep it in your file. But if there are some entries over there, you must do a thorough review to make sure that all those entries are complete and accurate. If you find some errors, file a dispute with the credit bureau and get the same rectified.

Contact Your Bank

You have a better chance to obtain a personal loan with no credit history if you apply to your own bank, the bank where you have a savings or checking account. Talk to the officer in the loans department and ask them to explain what kind of options you can have if you have no credit history and still want a personal loan. If your account is in good standing for over a year, your bank may consider extending a small line of credit to you. The older your account is, the better your chances of approval are. A few more things may also work in your favor, such as if you have never bounced a check and have always received your monthly or weekly salary in a timely manner.

Peer To Peer Lending

Alternatively, you can also consider going for peer to peer lending to obtain a personal loan with no credit history. You can apply online right from the comfort and convenience of your home. All you need is just a computer with internet access. There are several internet based lenders also that have special lending programs for those who have bad or no credit at all. However, before you sign up with any such bank, you must do a thorough research to make sure that you are not being trapped into any predatory form of lending. Always borrow from reputable lenders. Do a thorough background check before signing any document. You can contact the Better Business Bureau to check the past records of any bank or lender. If a particular lending institution is not listed with the BBB, do not sign up with them; it can be risky.

Home Equity Loan

The chances are that you will get an array of options where lenders will be willing to offer you unsecured personal loan with no credit history, but you are very much likely to be offered the same at a comparatively very high rate of interest. If you are looking for a low-rate option, a better alternative is to go for a home equity loan. Obviously, this alternative option is available to only those people who are fortunate to have some equity in their home. Since this is a secured loan, you can easily qualify for a low-rate loan. The only problem here is that this type of loan program requires you to put your home as collateral. If you fail to pay off the loan in time because of any reason, the lenders will seize your home and sell it off to get their money back. Therefore, you should consider this option only if you are sure that you can make the repayment in a timely manner.

Overall, though it is possible to obtain personal loan with no credit history, the task is not at all an easy one and requires you to do a lot of research and brainstorming.

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