With no credit history to establish financial dependability, no cosigner to serve as guarantor, and no job to provide income, how can an 18-year-old borrow money for the first time?
Private lenders risk their money and have strict underwriting criteria. Consequently, you must at the very least have a steady source of income to support repayment.
On the other hand, the federal government makes loans to social causes using taxpayer money. Therefore, if you intend to enroll in college or grow your business, you may be approved even with no prior borrowing experience.
First-Time Personal Loans No Credit
Because the contracts are unsecured, first-time personal loans may be more difficult to get for 18-year-olds with no credit history.
Unsecured means that you do not pledge any assets that the lender may seize if you fail to make payments. Instead, they must file a lawsuit before garnishing wages. As a result, businesses use the strictest underwriting standards, but they may still approve very small amounts because they are safer.
Young adults can employ a five-step plan to increase their chances of getting approved for an unsecured personal loan without a cosigner to serve as a guarantor.
Pay on time and in accordance with the terms to build a good reputation. Then, as your score rises, observe how you will gradually be able to borrow larger amounts. Table Of Contents.
Car Loan at 18 Without Cosigner
Because the contract is secured, first-time auto loans are a little bit simpler to get for 18-year-olds without a credit history. With this alternative, you pledge the car as collateral. The extra security counterbalances the lack of borrowing credentials.
If a finance company can seize a car in the event of default, losses are reduced. They can take possession of the car because they are the owners and sell it at an auction to recoup some of the money they lent.
Young adults can use this four-step strategy to increase their chances of getting approved for a secured car loan without a cosigner to serve as a guarantor.
Payday Loans for 18-Year-Olds
If you have a job and are 18 years old with no credit history, you can apply for your first payday loan. This alternative makes up for the lack of borrowing credentials with the quick repayment terms and the security of an auto draft.
Lender uncertainty is reduced because you have one or two weeks to repay the payday cash advance. Additionally, the guarantee of your subsequent paycheck lowers the risk of default.
Payday loans are not, however, a good option for all young adults without a cosigner to serve as guarantors.
No Job Required Loans at Age 18
Only the federal government would suspend all profit-seeking logic when lending money to 18-year-olds without a credit history, and get this: there is no job requirement.
Complete the Free Application for Federal Student Aid (FAFSA) form during the senior year of high school and enjoy incredible borrowing power.
Without a cosigner or parental help, 18-year-olds are eligible for the largest federal student loan amount. In contrast to private banks, parents are not required to serve as guarantors.
The government logic works in reverse. When you don’t have parental financial support, the cap increases.
| Subsidized Amount | Unsubsidized Amount | |
|---|---|---|
| Dependent | $3,500 | $2,000 |
| Independent | $3,500 | $6,000 |
Federal student loans are also automatically available to 18-year-olds without employment or income. Even young adults with low earning potential majoring in fields with low demand meet the standard.
You could be living in your parents’ basement playing video games all day, collecting unemployment or disability benefits. As long as you intend to enroll in college, you can still qualify even though there are no job requirements and no ability to repay.
Business Loans for 18-Year-Olds
If an 18-year-old without a credit history already has a successful business up and running with a track record of profitability, first-time business loans may be an option for them.
The Small Business Administration (SBA) is a government agency that boosts approval odds for borrowers through three programs.
So long as they adhere to SBA requirements for 7A loans, young adults without a cosigner could have the federal government serve as guarantor. There is no mention of personal credit history anywhere on the page, and operating a business profitably is at the top of the list.
FAQ
Can I get a loan if I’m 18 with no credit?
Everyone has to start somewhere, and while your options may be more limited if you’re under 18 and have no credit history, there are lenders who have more flexible credit score requirements and loans designed especially for first-time borrowers.
Can I get approved for a loan at 18?
If an 18-year-old without a credit history already has a successful business up and running with a track record of profitability, first-time business loans may be an option for them. Through three programs, the Small Business Administration (SBA), a government organization, increases the likelihood that borrowers will be approved.
Can you still get a loan with no credit history?
Yes, you can apply for a personal loan without having a credit history. However, if you apply for an unsecured loan, you may have to deal with higher interest rates and unfavorable loan terms.
What kind of loan can you get at 18?
- Loan terms for installment loans can range from months to years.
- You obtain a line of credit with flexible financing and repayment options known as a revolving credit.