When people encounter bad credit scores, they usually take a personal loan to fix the problem easily and simply, but what if you don’t have any credit history neither a cosigner?
Personal loans are the best choice for people who want to use it in any way they like (contrary to loans designed for specific reasons such as mortgage or auto loans). As they have low-interest rates, long repayment periods, and better terms overall, borrowers tend to use a personal loan, but then they might face difficult issues such as the lack of credit history or a cosigner.
With being said, in this article, we’re going to cover the most effective ways to fix this problem, but not before clarifying what a cosigner and credit history means for those uninformed.
What credit history and cosigner are?
Simply put, the credit history of a person is his/her record of total debts, number of credit lines, cards, timeliness of payment and how he managed his credit previously. Many lenders require a credit history check to decide whether to give or not a new line of credit to the customer, which is why not having a record can be such a complicated problem, especially in our case.
A cosigner, on the other hand, is a person who signs and agrees to pay someone else’s debt in case they fail to. Cosigners have to have an overall good credit score and a rich credit history in order for the loan application to be approved. As students or immigrants can’t take a loan themselves, they are obliged to have a cosigner, which makes everything more complicated.
Cosigners are hard to get and it’s just better to just find another way to get approved.
The best ways to get a personal loan without a credit history or a cosigner.
#1 Online lenders
Contrary to banks that decide your application verdict only by considering your credit history, there are countless of online lenders focused on students and immigrants who hassle with getting a personal loan.
Although it varies, the most common requirements to get approved are to admit your income, employment rank, and generally to prove you can afford to repay the loan in time.
Besides that, they also offer emulous interest rates and better terms and conditions for the customer. As they are competing with banks and other online lenders, it’s in their interest to attract borrowers to their side, therefore countless online lenders offer better customer policy than banks.
#2 No credit check loans
Similar to online lenders, there are other lending services designed to fulfill the needs of people who lack a credit history. As they understand the trap these people are caught into, these lenders focus on that block of people the most.
With that being said, these lending companies don’t require any credit check, which means they won’t know if you have credit history or not, making it easier for you to get a loan.
Again, you only have to show your income source and to prove you have a bank account.
However, be warned that some of these lenders could impose annual fees and loan renewal fees if you don’t pay the loan on time. Of course, all of this information will be brought into your knowledge in the agreement conditions, but we advise you to search for a company that doesn’t charge any fees.
#3 Secured loans
Secured personal loans are the best replacement for a cosigner as the pledge mechanism is pretty similar.
Secured loans require you to grant or leave collateral, for example, your car, bike or any other approved valuable object. Whereas a cosigner supports you getting the loan by taking a part of the responsibility, the collateral is an item you leave to the bank instead of exposing your credit experience.
Now that you know the best ways to get a personal loan without a cosigner or credit history, feel free to try any of this method and get your loan today.