How to Get a Loan with No Credit

Three Methods:Appeal to Family and FriendsLook for Alternative LendersDemonstrate Financial Responsibility

Getting a home loan, car loan, or personal loan with no credit can by hard to do, even if you are responsible with your money. Fortunately, there are a few different avenues you can explore that may get you what you need. Keep reading to learn more.

Method 1
Appeal to Family and Friends

  1. Image titled Get a Loan with No Credit Step 1
    Ask a direct relative to co-sign.[1] The most traditional way to get a loan without having your own credit score is to piggyback on the good credit history of someone else. A co-signer agrees to take responsibility for your loan debt if you should falter.
    • A direct relative, like a father, mother, brother, or sister, will usually be your best option. You could go to extended family or close friends if you have no other alternatives, but since these relationships are often not quite as strong as those made with direct relatives, they may take more of a beating if you encounter difficulties in repaying your loan.
    • Make sure that the co-signer understands the risk. Your loan will reflect on their credit report, so if things go bad, their credit score will take a dip. The co-signer is also responsible for your debt, so if you fail to pay, it falls to him or her to pay it off in your place.
    • Choosing a co-signer with a high credit score will improve your chances of securing a loan better than if you were to choose a co-signer with mediocre credit. A lender wants to make sure that the loan will be repaid. If your co-signer has a good credit history, that lender will feel more confident about whether or not its money will be returned.
  2. Image titled Get a Loan with No Credit Step 2
    Get a personal loan from family or friends. If you have a relative or close friend who is financially capable, you might be able to get a direct personal loan from that person, especially if he or she has some idea of how responsible you can be with your money. Treat this personal loan as a serious business transaction to avoid straining the relationship later on.
    • Traditional advice suggests that you never borrow money from family or friends. This situation could quickly get ugly, especially if the exchange of money is poorly documented, and one or both sides could end up feeling cheated. It should be used as a last resort and you must be extremely careful to avoid wrecking your relationship.
    • Create a written agreement defining the terms of the loan. Your document needs to include the interest rate, how much money is being borrowed, how much needs to be paid off monthly, when the loan needs to be paid off in full, any collateral you offer for the loan, and any consequences you will face if you fail to repay the money.
    • Check out legal help websites like LegalZoom ( and Rocket Lawyer ( for promissory note forms.

Method 2
Look for Alternative Lenders

  1. Image titled Get a Loan with No Credit Step 3
    Find out if your employer has a relationship with a financial institution. Some companies establish business relationships with financial institutions.[2] To go through one of these institutions, you will essentially need to put your salary on the line as collateral.
    • This is a more common practice among larger companies than small businesses, so keep that in mind if you work for a small company with limited resources.
    • The financial institution the company has a relationship with could be a bank or credit union, or an entirely different lending institution altogether.
    • These relationships will work one of two ways.
      • In the first, most common method, you will set up the terms of the loan with the financial institution and monthly payments will be deducted directly from your paycheck.
      • With the second method, you will set up the terms of the loan with the financial institution and make monthly payments as you would if you had secured the loan without going through your employer. If you fail to make your payments, however, your wages will be garnished and the money will be taken from them, plus additional interest.
  2. Image titled Get a Loan with No Credit Step 4
    Try applying to a credit union.[3] You may still need to prove some level of financial responsibility if you apply for a loan through a credit union, but in general, credit unions are more accepting than more formal lending institutions like banks.
    • Credit unions are owned, in essence, by their members. These members must have something in common, like an industry, religion, employer, or a geographic location. These institutions are nonprofit organizations, so the earnings are passed along to their members in some form (usually lower fees or improved services).
    • You can locate a credit union in your area by searching through your phone book or by doing an Internet search. There are even websites set up to help you with this search, including:
    • If possible, compare loans and terms of service from multiple credit unions to determine which has the lowest interest rates and best payment conditions.
  3. Image titled Get a Loan with No Credit Step 5
    Get a peer to peer loan. There are various programs in existence that allow you to obtain a personal loan directly from another individual instead of from an institution. You might find it difficult to secure a peer to peer loan if without first proving that you can be responsible with your money, though, so you should still be prepared to plead your case.
    • This is strictly done via an online platform. The process is streamlined, but you need to make sure that you go through a reliable peer to peer lending website or service to avoid getting cheated.
    • With most peer to peer services, borrowers sign up and post a loan listing. This listing describes the sort of loan they are looking for, including the reason for the loan and the amount of money needed.
    • From that point, investors can view the borrower's listing and determine whether or not it meets their criteria. The lenders can screen applicants and check your credit, and if you do not have credit, that information will be noted on your listing. This method allows you to explain more of your circumstances, though, and an individual investor may be more willing to take a chance on you than a large institution will.
    • A few noteworthy peer to peer lending websites include:

Method 3
Demonstrate Financial Responsibility

  1. Image titled Get a Loan with No Credit Step 6
    Contact creditors from alternative credit tradelines. If you have successfully managed to pay off leases and utilities for several months to a year, you have some record of financial responsibility, even though you do not have official credit or a credit score. If you can contact these creditors to ask for official verification of your financial record with them, you will be that much closer to proving your financial responsibility to a potential lender.
    • For major loans, like mortgage loans or car loans, try to make sure that you have at least one rent or lease payment to show.
    • As a general rule, try to have at least four alternative credit tradelines
    • Ask each creditor or institution for a letter on official letterhead indicating your name and account number. Ask them to state that your account has been "paid as agreed for the last 12 months."[4]
    • You can also provide copies of your latest utility bills to show that your accounts and responsibilities are currently paid in full.
  2. Image titled Get a Loan with No Credit Step 7
    Have an impressive down payment. A hefty down payment improves your chances of securing a loan, with or without credit. If for no other reason, it means that the amount of money you need to be approved for is lower, thereby improving your chances that an institution will be willing to take a risk on you.
    • A good down payment will also suggest to potential lenders that you have the means to pay off a loan as well as the ability to save and put money toward a purchase.
    • You should try to have a full 20 percent down payment.
  3. Image titled Get a Loan with No Credit Step 8
    Gather documents that prove you have the means to make payments. Statements from your employer and bank statements can indicate to a potential lender that you have the financial means to make consistent payments and pay off your loan.
    • Provide copies of your financial documents, including documents that reflect your savings, income, and monthly debts. Most lenders will want to see that your monthly debts will not be any higher than 36 percent of your gross monthly income.
    • Ask your current employer for a letter on company letterhead stating your position, how long you have worked for the company, and your current salary. Lenders are more likely to be encouraged if you have worked at the same company for two years or longer since it indicates some sort of financial stability.
  4. Image titled Get a Loan with No Credit Step 9
    Create your credit history now. As you go through the process of trying to secure a loan, you can start building a little credit history through official means. It may be deemed insufficient by some lenders, but if you can back up a baby credit history with other records proving your financial responsibility, it may carry more weight.
    • Establish a checking or savings account. Bank statements can be used to show lenders that you are responsible with your money and have not overdrawn your account.[5]
    • Apply for a credit card. Gas cards and department store cards are usually the easiest to get, followed by credit cards offered by a bank and connected to an account. You can also get a secured credit card, but you will need to make a deposit on the credit account to get one.
      • The card issuer must report to a credit bureau if you want to use the card to build a credit history.


  • If you are still unable to get a loan, save your money up until you can pay for the purchase with cash or until you can make an weighty down payment.
  • Start building up your credit now so that you will have an easier time securing a loan in the future. Getting a secured credit card and paying the balance off each month is a good way to start.


  • If you are trying to get a loan for a major purchase, like a mortgage or a car, try to get pre-approved for the loan before you start shopping. Otherwise, you might be disappointed if you find what you want but find out that you cannot get approved for the necessary loan.

Article Info

Categories: Mortgages and Loans