How To Get a First Time Loan With No Credit

Yes, you can get a first-time loan even if you have no credit — but you'll need to look at borrowing options that don’t depend on your credit history. 

If you borrow alone, lenders may charge higher interest rates. Or you may have to loop in a qualified co-signer — and hopefully net a lower interest rate.

These are some of the fastest and safest options for getting a loan with no credit, as well as the ones you should skip.

Key Takeaways

Here's what to know before you apply for a first time loan with no credit history.

• You can qualify without a credit history. A first time loan with no credit is possible through credit builder loans, secured credit cards, cosigned personal loans or authorized user status — though you likely won't get the lowest rates.

• A co-signer can lower your rate. A trusted co-signer with good credit may improve your approval odds and unlock lower interest rates and higher loan amounts, but a missed payment can hurt both of your scores.

• Building credit first takes time. Without a co-signer, expect three to six months of on-time payments to build a score strong enough to qualify.

• Aim for a score above 600 and a DTI under 36%. Meeting those benchmarks can improve your approval odds when you're ready to apply.

• Skip the high APR options. Payday loans run up to 400% APR and auto title loans up to 300% APR, with steep costs plus repossession or the risk of getting into a debt cycle.

Summary generated by AI, verified by MoneyLion editors

Can You Get a First-Time Loan With No Credit?

You can get a first-time loan with no credit history — but there's a catch. You won't qualify for the lowest interest rates, and your options may be more limited or require you to use a co-signer to gain approval. Some of the best first-time loan options for borrowers without credit history include:

• Credit builder loans

• Secured credit cards

• Cosigned personal loans

• Authorized user status on someone else's credit card

Best Ways To Get a First-Time Loan With No Credit

Credit Builder Loan

Best if you want to build credit to borrow in the future. The upside of credit builder loans is that they can help you improve your credit without requiring a hard credit pull to qualify, but the downside is that you can’t actually access funds until you pay off the specified loan amount.

A MoneyLion Credit Builder loan is available through a Credit Builder Plus membership and costs only $19.99 per month and comes with perks such as:

• No hard credit check¹

• Loan up to $1,000

• Monthly credit history reporting to help you build credit²

• Credit monitoring tools to keep a handle on your finances

Secured Credit Card

Best if you want to work up to an unsecured credit card. A secured credit card works like a credit card in reverse. Instead of racking up debt and paying it down, you deposit a set amount — say $500. Then, you can make up to $500 worth of purchases using your card. 

Secured credit cards offer a lower-risk method to build credit and control your spending. However, they also come with lower lending limits, additional fees and higher interest rates due to less market competition. 

Cosigned Personal Loan

Best if you have a trusted loved one willing to assume the risk. Personal loans are unsecured loans with few spending restrictions. This makes them an attractive proposition — but because they're unsecured, those with no credit have a hard time getting one. 

If you bring a cosigner to back your debt, you can improve your odds of approval and unlock lower interest rates and higher loan amounts. However, if you default on the payment, you risk not only your credit score but your cosigner's, as well. 

Authorized User Status

Best if your primary goal is to build credit. Becoming an authorized user doesn’t nab you a loan, per se. But it does provide a way to build credit for future borrowing. 

The way it works is easy: A primary account holder — such as a parent — adds you as an authorized user. Then, you can make purchases with a card issued. 

As an authorized user, you’re not required to make payments on the account. However, if the primary account holder misses a payment, your credit takes a hit, too. 

Loan Options That You Should Avoid

Not all loans are created equal. Some lending practices may seem like a great deal upfront, but they’re often riddled with fine print and extra fees. Here’s what you need to know about these not-so-savory borrowing options. 

FAQ

Does shopping around for a no-credit loan hurt your credit score? 

If you’re shopping around for a loan as a borrower with no existing credit, you may negatively impact your score in the short term if the lender performs a hard credit inquiry as part of the application process. Consider getting prequalified first, since many lenders perform a soft credit inquiry, which doesn't affect your credit score. Being an authorized user on someone else’s credit card also gets around a hard (or soft) credit pull.

How long does it take to qualify for a loan without a cosigner? 

If you have no credit and you’re looking for a loan without a cosigner, it can take three to six months of on-time payments to build up your score enough to qualify.

Can a credit union approve a first-time loan with no credit? 

A credit union may approve a first-time loan if you have no credit yet. Credit unions typically have more flexible requirements than banks and other lenders, and your application could have a better chance if you’re already a credit union member.

What documents does a first-time borrower need to apply?

A first-time loan applicant will generally need to provide pay stubs, bank statements and proof of identity. You may also need to provide W-2 forms and other proof of income.

Key Terms

• Credit builder loan: A loan designed to help people with little or no credit build history. You typically make fixed payments first and get the funds after payoff, and the lender reports your on-time payments to the credit bureaus.

• Secured credit card: A card that requires a refundable security deposit — often $200 to $500 — that acts as collateral and usually sets your credit limit. Activity reports to the major bureaus, helping you build credit.

• Co-signer: A person who agrees to pay back the loan if you don't. Their credit can also be affected if payments are missed.

• Authorized user: Someone added to another person's credit card account who can make purchases without being responsible for payments. It can help build credit, but if the primary holder's misses a payment, that can hurt your score too.

• Hard inquiry: A credit check that happens when you formally apply for credit. It can lower your score and stay on your report for two years.

• Soft credit pull: A review of your credit that has no impact on your score, often used for prequalification or credit builder loans.

• Credit utilization: The share of your available credit you're using. Many lenders consider a ratio above 30% to be high.

• Debt-to-income ratio (DTI): Your monthly debt payments divided by your gross monthly income. Lenders generally prefer a DTI under 36%.

Summary generated by AI, verified by MoneyLion editors

Anna Yen contributed to the reporting for this article.