Getting a personal loan without a credit history? Yes, that’s possible
Having a good credit history works in your advantage if it comes to requests for a personal loan. If you have no credit history, it is still possible to get a loan. There are several valid reasons for not having a credit history and most of the lenders understand it. However, that never means they will be lenient with you. They will adopt a nonchalant approach towards the borrowers having a blank credit history. But you can improve the chance of a positive outcome by pushing them, even a little bit, towards the positive possibilities.
Here are some important and effective tips on how you can get a personal loan without having a credit history.
Obtain a credit card
The first step to build up a credit history is to get a credit card. For the employed persons, obtaining a credit card is super easy. An important point to remember in regards to credit card usage is you must not go beyond 30% of the credit available on the card as it will negatively affect your credit history.
Responsible use of credit card will help you build up an impressive credit record that will improve your chance of availing a personal loan.
Most personal loans don’t require the borrowers to use collaterals. However, as you have no credit history, you can offer collateral such as your house or car to impress the creditors. The lending institutions always take some risks while granting loans. The risk increases manifolds when they sanction loans to someone with a blank credit record. Offering collateral will lower the risk on their part and enhances your chance of getting the loan.
Try to be a co-applicant
If you know someone who has a good credit history and the person has no problem to accept a co-applicant for a personal loan, then it could compensate for your blank credit record. Remember that a co-applicant has to share the same loan burden. In other words, you and your co-applicant have an equal responsibility to repay the loan. If the person fails to pay off his part and ends up being a defaulter, it will have a negative impact on your credit score.
Remember three Cs
The lending institutions consider three Cs while checking the loan applications – Credit, Character, and Collateral. As the first C is absent in your case, they will still consider your application if other two Cs are above average.
If you have a regular flow of income and ability to clear your personal loan, you have a good chance to get the loan. The house owners have clear advantages over those who live in a rented apartment. These are some positive sides to convince the lenders that you are a responsible person and will repay the debt in time.
Consider applying for a loan online
Applying online is the best solution if you want to request for a loan with a blank credit history. The online lenders usually go easy on the borrowers. If you have a steady source of sufficient income, there is a higher chance to get the personal loan. The criteria to obtain a personal loan and repay the same are more lenient if it comes to borrowing from an online lender.
Would you like to offer some other valuable tips on how to get a personal loan without a credit history? Please share those with us.