How to Take out A Loan With No Credit: A Complete Guide


credit report repair a couple sitting with a loan officer in an office Middle Class Dad

The personal loan industry is worth over 90 billion dollars. That massive number speaks to the amount of desperation that some people have financially, despite historically low unemployment numbers.

If you have college expenses to pay, medical debt that needs attention or need to get your hands on quick cash for any other reason, taking out a loan seems like a sensible solution. Unfortunately, many loan providers are picky and won’t do business with people that don’t have a credit history.

Despite the challenges that young people and new borrowers face when getting loan products, there are still a number of how to take out a loan with no credit solutions available.

Our complete guide on the subject takes you step-by-step through what you should do as a new borrower to get your hands on the cash you need.

Step One: Assess Your Borrowing Needs

Knowing how much money you need to borrow before borrowing will save you time comparing loan products. It will also protect you from borrowing more money than you need which decreases your risk of defaulting on your loan.

Remember, borrowing money costs money. The less that you borrow, the less that you’ll have to pay in lender-imposed charges.

Step Two: Confirm Your Credit Score

Borrowers that are interested in finding out how to take out a loan with no credit presumably have no credit score. You’d be surprised to learn how many people think they don’t have credit and find out that credit bureaus actually do have a file on them.

To confirm your credit situation, run a free credit check on yourself using any number of the online applications today that offer this service. The FTC also outlines how you can request physical credit reports.

Step Three: Consider Your No Credit Loan Options

Upon confirming that you do not have any credit, it’s time to weigh potential borrowing options. Note that if you found that you have bad credit when checking your score as opposed to no credit, the following borrowing suggestions may still be valuable to you:

Car Title Loans

Car title loans are a common how to take out a loan with no credit strategy because most people own cars that hold over $1000.00 in value. If you own a car and have your title in-hand (ie: a bank does not have a lien on your vehicle), you can go to a car title loan company and borrow against your car’s worth.

Just be aware that delinquent payments could result in the repossession of your vehicle.

Pawnshop Loans

Pawnshop loans work just like car title loans. The primary difference is that pawnshops take a wider variety of collateral (rings, television sets, etc.).

Bring a piece of property into a local pawn shop and a pawn clerk will assess it. Once the item’s worth has been discerned, the clerk will let you borrow against its value. If you don’t pay back your loan on time, your item will be forfeited and your loan will be forgiven.

Payday Loans

Payday loans are targeted at desperate people given their lender-friendly terms and ease of acquisition. To get a payday loan, all you need is a checking account, a job and a form of ID that confirms that you’re an adult.

Loans Targeted at New/Bad Credit Borrowers

There are a number of online lenders that advertise guaranteed approval loans for people with no credit or bad credit. Brick-and-mortar banks also offer similar loans for credit building purposes.

Weigh your options both online and off to see which loans are available. Just be sure to assess each loan’s terms carefully.

Step Four: If Loan Options Are Insufficient, Get a Co-signer

Co-signers are third parties that offer to back your loan if you don’t pay. With a co-signer’s signature, a number of lenders that wouldn’t typically consider you might approve your loan application.

Finding a co-signer can be difficult given the risk that they’re accepting on your behalf. It’s important that your co-signer has good credit if you want their signature to sway your application’s outcome.

Step Five: Rely on Family and Friends

If you can’t get a formal lender to give you the loan that you’re looking for and you don’t have property for collateral-based loans (car title loans, pawn shop loans, etc.) turn to family and friends.

Family and friends that trust you may be willing to loan you the money that you need without having to run your credit. Loans offered by family and friends may also be free which comes in stark contrast to the steep interest rates and fees that lender-backed loans carry.

Step Six: Build Your Credit History

The only way that you can improve your future loan-getting options is to start building your credit. You can do this by properly managing your outstanding no/bad credit loans or by doing seemingly unrelated things such as paying your utility bills and keeping up with your house rental payments.

Closing out Our How to Take out a Loan With No Credit Guide

We hope that we’ve managed to answer your how to take out a loan with no credit questions and that you’re feeling confident about your prospects of getting the money that you need.

Always remember to review all loan products carefully to ensure that their terms are not predatory.

If you find yourself craving additional financial advice or other lifestyle tips, consider checking out more of the content that’s most relevant to you on our blog!

Jeff Campbell

Jeff Campbell is a husband, father, martial artist, budget-master, Disney-addict, musician, and recovering foodie having spent over 2 decades as a leader for Whole Foods Market. Click to learn more about me

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