How to Get a Loan with No Credit History

Written by Banks Editorial Team
6 min. read
Written by Banks Editorial Team
6 min. read

Sponsored By

It’s a dilemma consumers face every day. How do you get a loan with no credit history? And how do you build a credit history if you can’t get a loan? To avoid discouragement, it’s important to do what you can to establish good credit while also finding a way to borrow money when you need it. If you’re wondering if you can get a loan if you have no credit, this guide can help.

Get a Digital Credit Card
Access a revolving line of credit based on your cash flow, not your credit score, with the Grain digital credit card.

Getting A Loan With No Credit History

Getting a loan when you don’t have a credit history is not easy, but it is possible. However, you may pay higher interest and even be required to pay an origination fee, depending on the lender. You might be wondering what the easiest loan to get approved for. If you’re avoiding alternative loan options, such as payday loans or pawn shop loans, consider these options for getting more traditional financial assistance.

Leverage Your Income

To leverage your income in order to get a loan, your best bet may be to contact the bank, credit union or other financial institutions where you have accounts. They will look at your account history and determine that you are a worker with a steady paycheck. That relationship may convince the bank to offer you an auto loan or other financing even if you have no credit history. An alternative way to leverage your income for a loan is to ask your employer for a paycheck advance. They may offer to pay advances through a third-party company that will charge a fee and allows you to repay the advance in installments.

Try For a Lower Loan Amount

You might be able to get a loan with no credit history if you try for a lower loan amount. It could be a short-term loan, and you will probably pay a higher interest rate, but there are lenders that will risk a loan for a lower amount to borrowers with no credit history. It’s always a good idea to ask the bank, credit union or online lender about their application process if you have poor credit.

Provide Collateral

Some lenders will give you a loan with no credit history if you provide collateral. These types of secured loans are not easy to get, however. Collateral is an asset you own that you can offer to the lender as a guarantee that you will repay the loan. Some examples of collateral are houses, cars, property, jewelry, valuable collectibles, artwork and investments. If you do not repay the loan, the lender can seize the asset.

Get A Co-signer

Another way to get a loan with no credit history is to get a co-signer. This could be a spouse, parent or other family members who have a good credit score and will vouch for you that you will repay the loan. They might qualify for the lowest rates. Be cautious when asking a trusted friend or relative to be a co-signer, however, since you risk the relationship if you are unable to make monthly payments to repay the loan.

Opt For A Secured Loan

If you do go for a secured loan, you will be expected to provide collateral. Personal loans are usually unsecured, which means the borrower is not required to offer collateral. When you get a secured loan, the lender takes out a lien on the asset you have offered as collateral. Just make monthly payments to pay back the loan, and the lien is removed.

Get A Line Of Credit You Can Use From Your Existing Checking Account

A great alternative if you don’t have a credit history is to get funding based on your cash flow. Grain is a mobile app that recognizes you are more than a credit score. With Grain, you manage a line of credit for day-to-day expenses with quick transfers of credit to your checking account. A line of credit works similarly to a credit card, but Grain takes away all the guesswork and has an easy application process. Here’s how it works in 3 simple steps:

  • You download the Grain app and sync it with any of the over 10,000 banks Grain supports.
  • Connect your primary checking account and get instantly approved for a line of credit.
  • Use your debit card and put Grain to work for you.

Using a line of credit from Grain will help you establish and build a good credit score. Grain offers bank-level security, so you know your money is safe and secure.

Get a Digital Credit Card
Access a revolving line of credit based on your cash flow, not your credit score, with the Grain digital credit card.

What It Means To Have No Credit History

There are many reasons you may not have a credit history. If you are a young adult who has never had a credit card or car loan, it’s quite probable you have yet to establish a credit history. Perhaps you have avoided going into debt for any number of reasons, such as not wanting to make monthly payments or asking a family member to co-sign on an auto loan. The main way to build a credit history is to have qualified for an auto loan, college loan or to buy a home. You also establish a credit history and boost your credit score by using credit cards responsibly. Only then will your credit report begin.

How Does It Differ From Having Bad Credit?

Having no credit history differs from having bad credit in a number of ways. First of all, having no credit history simply means you have yet to use many forms of credit. You haven’t had reason to finance a car with a loan, or you haven’t used credit cards. You will not have a credit report with no credit, but you will have a credit report with bad credit. If you have bad credit, on the other hand, it’s a sign that you have mishandled credit by not paying bills on time, defaulting on a loan or maxing out credit cards, so you have too much debt in relation to your income. Ironically, it may be easier to get a loan with bad credit than no credit history at all, simply because lenders have nothing to judge your creditworthiness by if you have none.

Is It Possible To Get A Loan with No Credit History?

Is it hard to get a personal loan with no credit? Fortunately, some lenders make it possible to get a loan with no credit history. You might be able to get an online loan. But you will probably pay higher interest rates and will be able to borrow smaller amounts than if you had an established credit score that proves you are worth the risk to lenders. To qualify for lower interest rates, a good idea is to build a credit history.

No-Credit-Check Loans You Should Avoid

While there are several ways to get a loan with no credit check, they should only be used as a last resort. No-credit-check loans charge high-interest rates and usually require you to pay them back sooner than you are able. And that can lead to penalty fees you can’t afford. Here are just a handful of examples.

Pawn Shop Loans

With pawn shop loans, you get cash in exchange for one or more of your possessions that are then used as collateral. It’s a simple application process. The pawnbroker decides the value of your item and gives you a loan based on that amount. Once you pay back the loan, your collateral is returned to you. As a result, pawn shop loans won’t negatively affect your credit score or help you improve your credit score.

Payday Loans

Payday loans are available at check-cashing stores or online and don’t require collateral. They are usually for less than $500. Payday loans are easy to obtain but hard to pay back because high-interest rates and transaction fees add up before you get your next paycheck. If you use a check-cashing store, you provide a post-dated check, and if you get a payday loan online, you supply your bank account information. For example, you might need $200. So you write a check for $250 and date it with the date of your next payday. The lender gives you $200 and keeps the $50 right away. If you don’t pay back the loan by the date on your check, you’ll owe even more, which is exactly what the payday loan provider wants. And if you do pay it back when you get your next paycheck, you’re already behind by $250.

Cash Advance Loans

Cash advance loans are similar to payday loans. For cash advance loans, you get cash from a lender in exchange for a check you write to them for the amount you’re borrowing, plus a high fee. If you get a cash advance online loan, you will be required to provide bank account information instead of a physical check. The lender holds the check until you pay back the cash advance. Cash advance loans are short-term since the lender will expect to be repaid by your next payday. Credit card companies also offer cash advances, but you can’t get a credit card without a credit history.

Title Loans

Title loans are secured loans where you use your car, truck or other vehicles as collateral. If you get a title loan, you allow the lender to place a lien on your car title and give the hard copy of your vehicle title to the lender in exchange for the loan. You can get a title loan fast if you need the cash, but the financing term is usually just a few weeks or a month at most. Every month you need to extend the loan, and the interest rate climbs higher and higher, which makes it more difficult to pay back. What’s more, the loan will be for much less than the value of your car, and if you cannot repay the loan, you lose ownership of your car. Title loans are not reported to credit bureaus, so they have no impact on your credit score.

Get a Digital Credit Card
Access a revolving line of credit based on your cash flow, not your credit score, with the Grain digital credit card.

Disclaimer: Credit offer based on cash flow in the linked checking account and may require a credit check. All accounts are subject to ID verification and approval. See your Credit Agreement and Terms of Service for further details.

You may also like

If you're right in the middle with a fair credit score, unsecured credit cards may accessible and will likely come with fewer incentives.
Read more

Advertisement Disclosure

Product name, logo, brands, and other trademarks featured or referred to within are the property of their respective trademark holders. This site may be compensated through third party advertisers. The offers that may appear on’s website are from companies from which may receive compensation. This compensation may influence the selection, appearance, and order of appearance of the offers listed on the website. However, this compensation also facilitates the provision by of certain services to you at no charge. The website does not include all financial services companies or all of their available product and service offerings.