How to Get a Loan for the First Time [With No Credit]


Are you trying to get a firsttime loan with no credit because you don’t have an established credit history? Would you like to avoid paying higher interest rates?

There are several things you can do to get that loan as easily as possible.

We’re going to cover some interesting topics for everyone looking to get a first-time loan, such as:

  • What is a credit score?
  • What is a credit history?
  • Types of loans you can get without a credit history
  • Guide on getting your first loan
  • Useful tips
  • FAQ

What Is a Credit Score?

Simply put, a credit score is a numerical value ranging from 300 to 850, which indicates how good your “credit behavior” has been in the past (your credit history). Credit scores are measured using FICO scores, where anything under 630 is considered “bad”, while a score over 720 is considered “excellent”.

These scores are used by banks and other lenders in order to assess just how certain it is that they will get their money back if they give you a loan. A credit score can influence loan approval, as well as loan amounts. If this is your first time getting a loan, you will have no credit score whatsoever, which is why lenders sometimes apply higher rates to a first-time borrower.

What Is a Credit History?

The score of your credit depends mostly on one thing – your credit history. It shows just how diligent you were in paying off your debts in the past, directly influencing your FICO score.

For people getting first-time loans, no credit history can be a bit of an obstacle because the lenders do not know what to expect of you as a borrower. This is why the eligibility requirements may be a bit stricter for first-time borrowers.

Types of Loans You Can Get Without a Credit Score

It may seem a bit daunting and unfair, but do not despair. There are many possibilities for getting first-time loans with no credit, and some of them are:

  • A loan in your current bank: This may be the most obvious choice for people looking for first-time personal loans with no credit history. Your bank already has an insight into your regular transactions and they can use it to make a more realistic assessment of your creditworthiness.
  • Small unsecured loan: In case you don’t need a lot of money, small unsecured loans may be a pretty good option. They can be repaid quickly and they are a good way for you to start building a good, positive credit score. Plus, if they are unsecured, you don’t have to worry about repossession.
  • Credit-builder loan: These are great loans for young adults with no credit. Here’s how they work. A lender gives you a small loan (usually between $300 and $1,000) and places the amount in a secured savings account. The difference with these loans is that you cannot access the funds until you have paid off all the installments. After which, your lender informs the credit bureaus, and your credit score starts taking shape.
  • Secured car loan: A first-time car loan with no credit is a great option. Basically, you apply for a car loan and use the car you’re buying as collateral. This way the lender has some security, and you don’t have to fear repossession of some other items that are important to you.
  • Co-signer loan: Now these are probably the top personal loans if you can find a co-signer with a good credit score. A co-signer with a good credit history provides an extra guarantee to the lender, and if you pay off a co-signed loan on time, it can do wonders for your own credit score.

What to Consider When Looking for a First Loan Without Credit

Getting a first-time loan with no credit can be a very confusing experience, especially if you are new to loans. Here are some tips for getting your first loan:

  • Interest rates: While we did mention that first-timers usually pay higher interest on their loans, there is no need for you to pay more than you have to. Always consider several options before you decide on a lender, especially the interest rates for first-time personal loans.
  • Loan amounts: When it comes to amounts, we suggest starting off with a small personal loan, just to establish your credit history and FICO score. You will most likely repay it quickly, and you will be able to get a bigger loan when the need for it arises. Before doing this, check out what some of the must-know personal loan information is so that you are well-prepared before applying.
  • Origination fee: All lenders will charge you a number of different fees, and this is one of them. This is the fee that you pay for the expenses of setting up your account with the bank or any other type of lender. Make sure to consider this, because it can sometimes be a very unpleasant surprise, especially when you are getting a loan with no credit.
  • Monthly fee: Different lenders charge different fees. Always make sure to find out the exact amount of all the processing fees your lender charges and pay special attention to monthly fees. You do not want to end up paying more in fees than what you borrowed.
  • Early repayment fee: Early repayment is a great thing for anyone who managed to save up extra and is looking to settle their debts as soon as possible. But be aware of the early repayment fees. Always ask your potential lender what the fee will be in case you decide to settle your debt before the final installment.

Step-By-Step Guide for Finding the First-Time Loan

If you are still wondering how to get a loan for the first time, here is a rough step-by-step guide:

  • Get the information on your credit score: This is fairly easy – there is a great number of online lenders who offer a free FICO calculator. You can also request a free credit report annually from any of the three main credit bureaus.
  • Provide information about your work history: Your employment history may be an important factor for your lender to consider because it gives them insight into how your income has fluctuated over the years and helps them predict just how likely it is that you will repay your loan on time.
  • Find a co-signer: Getting a first-time borrower loan can be made much easier if you get a co-signer with a good credit score. If you make all your installments on time, this deal can benefit both you and your co-signer a great deal.
  • Compare offers from different lenders: Do your research. You may be surprised just how much difference an offer from a different lender can make. Even though some offers look similar on paper, you may end up paying a lot more because you failed to ask about the various fees.
  • Get pre-approved: With first-time personal loans, no credit history does not mean that there’s going to be no paperwork. You will still need to provide various documents. They will be checked and if everything is in order, your loan request will be pre-approved and you will be ready for the last step.
  • Apply: Now that you have double-checked everything, you are ready to submit your paperwork to your potential lender. Usually, you will not need to wait for long to know if you meet the eligibility requirements.

Why Is It Hard Finding a Loan Without Credit?

Getting a first-time loan with no credit is rather tricky, but why is it so? Isn’t no credit better than bad credit?

Of course, it is. It’s just that lenders want to make sure that their money returns to them and make some profit while they’re at it.

Giving a loan to someone without a credit score or history is a shot in the dark, and that is why it can sometimes be difficult to get one.

Alternatives to Loans When You Don’t Have Credit

Let’s say that you are young, you have no credit history, and you are looking to get some cash quickly. But you are just not ready to go through the hassle of getting one of the loans for young adults with no credit. There are still a few things you can do, such as:

  • Borrowing money from a family member or friends: This is the most obvious option. If you think that you are trustworthy enough to ask for a loan from a bank, then your friends or family members will likely be willing to lend you some cash to help you.
  • Nonprofits: This is a rather interesting concept. Instead of getting a loan with high-interest rates, you can use one of the many nonprofit platforms. Through these platforms, you can basically share why you need the money and people can decide to help you if they like your idea or feeling that you really need the money. GoFundMe or Kickstarter are good examples of these.
  • Ask your employer for a cash advance: Most companies have this option for their employees. You can simply go to your HR department and ask them for a bit of cash in advance, and they will deduct it from your next salary. As simple as that.

Pros and Cons of Getting a First Loan With No Credit

Pros Cons
  • Helps you build a good score
  • Starts your credit history
  • A good entry into the world of finance
  • Small loans
  • Paid off quickly
  • High-interest rates
  • Many different fees
  • Can be risky
  • Limited borrowing options

Tips for Obtaining First-Time Loans

Here are a few things to keep in mind when you apply for a first-time loan with no credit:

  • Have savings: Having some money on your savings account is always a good sign for your lender because they will know that you have something to fall back on in case you start missing out on your payments.
  • Make a deposit: Doesn’t matter how small, a deposit can be seen as a sign of good faith and initiative. Your lender will trust you more if you start repaying immediately.
  • Provide a letter from an employer: Having someone vouch for you is never a bad thing, right. Your employer can also provide you with a salary certificate, which you can submit as a part of your application.
  • Ask for a smaller loan amount: You should start off with a small personal loan. You can repay it quickly and set off with a good credit score.
  • Apply for a secured loan: It doesn’t matter if you are looking for personal loans for young adults, or any other type of loan, providing some sort of collateral always looks good in the eyes of your lenders.

Wrap Up

So, we hope that we’ve shown you that first-time loans, while a bit more difficult to acquire, are nothing to be afraid of. They are a good way for you to set up your credit history and achieve a good FICO score.
Whether you are a young adult who never had a chance to get a loan, or you simply used your cash or debit card for making payments until now, you should know that there is a wide variety of loans available for you. There are so many personal loans for bad credit, so there are bound to be some options for people with no credit too. Do not despair, and focus on finding the right offer for you.


Can you take out a loan at 18 with no credit?

Absolutely. There are lenders who offer loans for 18-year-olds with no credit. Just follow our tips to make sure you find the right one for you.

How can I get my first loan with no credit?

Getting a first-time loan with no credit can be a bit trickier, but it is not impossible. Most lenders and banks are making it more and more common. Just go to your local bank or look at some online lending platform to find out more.

How can I get a first-time car loan with no credit?

Surprisingly, these can prove to be much easier than other types of first-time loans. Lenders will be more than happy to approve this type of loan if you are willing to secure the loan with your new car as collateral.


I learned a lot about finance after working for a digital marketing company specializing in investing and trading stocks, forex, etc. After that, I got exposed to other verticals such as wealth management and personal finance, which further improved my understanding of the financial world.

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