Can I Get a Loan with No Credit?
Summary
Wondering if you can get a loan with no credit history? You may qualify depending on your situation. Explore borrowing options that don’t require a credit check.
In this article:
If you’re facing an emergency expense like an auto repair, leaking roof or unexpected travel, but don’t have the cash to pay for it upfront, a personal loan could help you find some relief. But if you haven’t used credit before, you might be wondering if it’s still possible to get a loan.
Having no credit history means that you likely don’t have much of a credit report, and you may not have a credit score, which lenders use to assess how likely you may be to repay your debts. However, it doesn’t necessarily mean a loan is out of reach. You may still be able to get a loan, depending on what factors the lender considers before approving an application. Let’s explore some loan options that might be available to you, so you can decide what’s best for your financial situation.
Why is your credit history important?
Your credit history is a record of how you’ve managed your credit over time. This record is compiled into individual credit reports by the three major credit bureaus — Equifax, TransUnion and Experian.
Your credit history helps lenders determine how likely you are to repay borrowed money. Having a good credit history can make it easier for you to get loans and credit cards, rent an apartment and even lower your insurance premium.1 If you've never borrowed money or used credit in any form, however, it can be difficult for lenders to assess your creditworthiness.
What loan options may be available with no credit history?
Fortunately, there are a few different types of loans that may be available to you, including:
Personal loans
A personal loan is a lump sum of money you can use to cover unexpected costs, make home improvements or pay down debt. You repay the loan with interest (the cost of borrowing) by making fixed monthly payments for a set period of time.
Other lenders may have different ways of evaluating applicants, but OneMain works with a wide range of customer credit scores and takes your whole financial picture into account to help you find a loan that’s right for you.
There are two common types of personal loans that someone with little to no credit history might find it easier to qualify for: a secured personal loans and a personal loan with a cosigner.
Secured personal loans
A secured loan requires collateral — something of value you own, such as a vehicle — to back the loan. The collateral typically has to meet certain eligibility requirements, such as the condition and age of your vehicle and proof of insurance. If a borrower defaults on a secured loan, the lender has the right to take the collateral. A secured loan could boost your borrowing power by helping you get access to a higher loan amount or lower interest rate.
Cosigned loans
If you don’t qualify for a personal loan because you don’t have credit, you might increase your chances of approval by applying with a friend or family member with stronger credit. Unlike a co-borrower, a cosigner doesn’t have access to the loan funds. However, the cosigner is equally responsible for repaying the loan if you don’t.
Many lenders, including OneMain, have rules about who can qualify as a cosigner — and some lenders do not allow cosigners.
Note that if you fall behind on making your payments, not only will your cosigner be responsible for repaying the loan, but their credit score can also be negatively affected.
Friend and family loans
A loan from a family member or a friend may be another borrowing option. If you do borrow from a loved one, make sure you discuss, agree on and document the terms of the loan so that everyone is on the same page. Also, it’s a smart move to pay back the loan as agreed to avoid straining your personal relationship.
401(k) loans
A 401(k) loan allows you to borrow money from your retirement savings account, typically up to 50% of your vested balance or $50,000, whichever is less.3 Unlike most personal loans, there’s no credit check required and the interest you pay goes back into your account. Generally, you must repay a 401(k) loan within five years.4
Payday loans
Payday loans are short-term, high-cost loans with very short repayment periods — typically two to four weeks.5 Payday loans usually come with higher APRs than other loans and extremely high fees, which can quickly lead to a cycle of debt. For this reason, payday loans aren’t legal or available in every state. Be sure to weigh all your options thoroughly before choosing this route.
Pawn shop loans
Pawn shop loans are short-term loans secured by collateral, such as a musical instrument or diamond ring. Pawn shops may charge finance fees with an APR as high as 200%.6 Repayment terms may be as short as 30 to 90 days. 7
In most cases, pawn shops lend only a small fraction of the item’s estimated value — anywhere from 15% to 60% — and that value is determined by the pawn shop.
If you’re unable to repay the loan, the pawn shop is legally entitled to keep and sell your item.
Title loans
A title loan is a short-term, high interest loan that allows you to borrow funds by effectively using your vehicle as collateral. You’ll typically hand over your vehicle’s title to the lender temporarily in exchange for cash, while keeping possession of the vehicle. The APR on a title loan can be as high as 300%, with a repayment period of around 15 to 30 days.8 If you fall behind on your payments, the lender has the right to take and then sell your vehicle, which could put you in more of bind if you depend on your car for work or school.
Steps to apply for a loan with no credit history
If you're planning to apply for a loan and you have little or no credit history, expect to follow these steps.
Figure out your ideal borrowing amount and a plan for repayment
First, look at your income and expenses to figure out what monthly payment you can afford. Before deciding if a loan is right for your budget, it’s smart to think about the financial impact of increasing your monthly expenses. Also, consider how much you need to borrow. If you have a car repair that costs $1,500, for example, you may not want to borrow $5,000 and then find it difficult to pay back your loan. It’s important to make sure that you need the amount you want to borrow and have considered other options before you decide to apply.
Collect your documents
No matter what kind of credit history you have, it’s a good idea to ensure you have certain documents and information handy before applying for a loan. Most lenders will ask you for a government-issued ID, such as a driver’s license or passport, as well as pay stubs, tax returns and/or recent bank statements. The requested documents will vary depending on the lender and the type of loan you’re applying for.
Prequalify
Depending on the type of loan you’d like to get, you might be able to prequalify for a loan without impacting your credit score. Prequalifying may give you a preview of what loan amount may be available, subject to change based on the amount of additional financial information included in your full loan application.
Apply
After you choose the loan that works best for you, you can apply online or in person, if the lender has a brick-and-mortar location near you. Be sure to double-check your application, as errors or inaccuracies may lead to delays in the approval and funding process. Please note that a hard credit check generally won’t happen until you actually submit your application.
Accept the loan
While it may be tempting to accept a loan immediately, especially if your options are limited, it’s important to carefully review the agreement documents. Before you accept, make sure you’re aware of the total cost of the loan and feel comfortable about how you’re going to be able to repay it. OneMain offers borrowers clear terms and fixed monthly payments. Plus, you can pay off your loan early without any prepayment penalties.
No credit doesn’t mean no options
Having no credit history doesn’t automatically mean you’re out of options if you need to borrow money. Under certain circumstances, a loan may still be within reach.
Before you apply, compare available options and make sure you can comfortably repay what you borrow before you sign on the dotted line.
If you don’t quite meet the lender’s approval criteria today, you still have time to build your credit score and apply in the future.
When you’re ready to borrow, choosing a loan that fits your budget can help you manage today’s expenses without losing sight of what’s ahead.
Sources
1 https://www.experian.com/blogs/ask-experian/why-is-building-credit-important/
2 https://mycreditunion.gov/manage-your-money/home-ownership/home-equity-loans-and-lines-credit
3, 4 https://www.irs.gov/retirement-plans/plan-participant-employee/retirement-topics-loans
5 https://www.consumerfinance.gov/ask-cfpb/what-is-a-payday-loan-en-1567/
6, 7 https://www.nerdwallet.com/article/loans/personal-loans/pawnshop-loans
8 https://consumer.ftc.gov/articles/what-know-about-payday-and-car-title-loans#car
This article is for general education and informational purposes, without any express or implied warranty of any kind, including warranties of accuracy, completeness, or fitness for any purpose and is not intended to be and does not constitute financial, legal, tax, or any other advice. Parties (other than sponsored partners of OneMain Financial (OMF)) referenced in the article are not sponsors of, do not endorse, and are not otherwise affiliated with OMF.
This article has been updated from a previous posting on February 7, 2025. Skyelar Kavanagh contributed.This article is for general education and informational purposes, without any express or implied warranty of any kind, including warranties of accuracy, completeness, or fitness for any purpose and is not intended to be and does not constitute financial, legal, tax, or any other advice. Parties (other than sponsored partners of OneMain Financial (OMF)) referenced in the article are not sponsors of, do not endorse, and are not otherwise affiliated with OMF.
