If you haven’t had a loan or a credit card before, it can be difficult to find a company willing to loan you money. To most lenders, having no credit history is just as detrimental as having bad credit. But there are plenty of options to mull over before giving up on getting a loan. You can still get bank loans with no credit history as long as you fulfill certain requirements. Otherwise, you might consider payday or title loans as another option for getting a smaller loan.
If you are looking to https://slickcashloanca.blogspot.com/2021/01/7-options-for-borrowing-money-and-when.html borrow money but have no credit history, one of the first things that you should consider is going to a bank or credit union where you already have an established relationship. If you have a longstanding established relationship with the bank or credit union, such as having a checking or savings account open, it can help your case in getting a loan. Banks will also look at things like employment and bank accounts to assess your risk even if you do not have a credit score.
In addition, you can improve your chance of getting approved for a loan if it’s a secured product. For instance, you might consider getting a secured credit card as your first credit card as it’s one of the easiest types of cards to get. A secured credit card requires a cash collateral deposit that becomes the credit line for that account.
Secured loans, like a title or home equity loan, are also easier to get because the amount loaned is based on the value of a car or home. They also often have the added advantage of having lower interest rates, since they are more favorable to lenders. There is, however, a significant downside for the borrower. As these loans are paid out based on the value of your home or car, if the borrower fails to make a payment, the collateral may be repossessed or foreclosed. As such, they pose a far greater risk to the borrower. Though they are riskier, they can be a last chance effort to borrow money if all other avenues are closed off.
While doing your search, be sure to compare the interest rates–usually given as APR, or annual percentage rate–on your loan, as well as all fees. Depending upon the type of loan you’re getting, the fees can get quite high and effectively increase the rate you pay by quite a lot. As with any product, it pays to shop around to find the best deal, with the best combination of terms.