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Last Updated 03.01.2023
Last Updated 03.01.2023

What Is a personal loan no credit history?

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Can You Get A Personal Loan With No Credit History?

Can You Get A Personal Loan With No Credit History? - photo 3

If you’re looking for a way to consolidate your debt or need additional funds to make major purchases, a personal loan may be the answer. But what is a personal loan, and more importantly, can you get one with no credit history?

The short answer is yes. There are several companies that specialize in lending money to individuals with bad credit or no credit at all. These loans are called low-DOC loans or bad credit loans because they’re usually issued with poor credit ratings. This makes the loans more expensive — but it also makes them more attractive to potential borrowers.

The long answer involves a bit of financial history. Before we begin, it’s important to note that while you may be able to get a personal loan with no credit history, it won’t be the best option for everybody. If you’re looking for a short-term cash infusion to make major purchases or pay off existing debt, a no credit check loan may be the best choice for you. But if you’re looking to build a long-term relationship with a lender, it’s important to consider your credit score and history.

What Is Bad Credit?

When applying for a personal loan, the lender will almost certainly do a quick review of your credit score. This is a three-digit number that represents your creditworthiness. The higher your score the better. The three major credit bureaus — Experian, TransUnion, and Equifax — will provide you with your credit score and report it to potential lenders, including those who specialize in loans for individuals with bad credit.

What makes your credit score bad? It can be anything from a single credit card statement hanging over your head to multiple credit cards and a bankruptcy filed under your name. All of this is considered to be bad credit. Sometimes credit score is impacted by the number of late payments you’ve made on your credit cards. If you’re currently experiencing financial strain and are worried about the impact it may have on your credit score, it’s best to consult with a credit repair expert. They can help get your credit score back on track and establish a credit history that will make you more attractive to potential lenders.

Even if you’ve never been late on a payment or had your credit score lowered, it still may be difficult to get a loan with bad credit. Most banks and lending institutions require that you have a minimum credit score in order to qualify for a loan. If your score is below that amount, additional lenders will not likely touch you with a 10-foot pole. It doesn’t mean that you can’t get a loan, but it does mean that you’ll have to go through a lot more red tape.

Because of the extra hoops that you have to jump through in order to get a loan with bad credit, it’s important to weigh the pros and cons of this type of financing before you commit. For example, you may want to consider asking yourself if you really need the money because you can get cash advances on your credit cards if you’re experiencing financial hardship. Of course, this depends on how you plan on using the money. If you want to make large purchases, you may want to get a higher-limit credit card so you can take advantage of cash advances and avoid potential fee hikes.

Can You Get A Personal Loan With No Credit History?

Yes, you can get a personal loan with no credit history. But as we’ve established, this option isn’t for everybody. If you’re looking for a short-term cash infusion, it’s probably best to seek out a traditional loan broker who specializes in loaning money to individuals with poor credit. You may be able to get a personal loan with no credit history if you meet the minimum credit score requirements set by your lender. However, it will be a struggle to get approved for this type of loan.

Why? Because as the lender, they’ll have to put your credit rating and history on record. And since you have no credit rating, it’ll be difficult to prove that you’re a reliable borrower. So in a nutshell, be realistic about what you can and can’t do with this type of financing. Also, keep in mind that because you have no credit history, your interest rate will be higher. Typically, these loans allow for some leeway on interest rates, but not much. Your interest rate may be as high as 30 percent or more for a loan of this nature. But if you’re feeling adventurous, you can always apply for an unsecured loan with a virtual credit card. Those are usually offered at much better rates than a standard loan (around 7 or 8 percent) and don’t require you to have any credit history at all.

How Long Does It Take To Get A Personal Loan?

The waiting time to get a personal loan varies from a few days to a few weeks, depending on the lender. But typically, you’ll have to wait a few days for the funding to be approved and then a few more days to actually get the cash. Once you get the cash, it’ll take about a week to two weeks to get your credit score updated with the new lenders. So in summary, you’re looking at at least two to five weeks of waiting time before you can start making regular payments.

In some instances, the lender may require an extension of time to make the first payment. In those cases, you’ll have to wait until the lender grants you an extension before you can make a payment. Typically, lenders don’t like to see payments early, so they’ll likely require you to pay a little bit more attention to your bills and paperwork to avoid any late-payment issues. But other than that, it’s generally a smooth transaction once you get the approved funds.

Are There Any Penalties For Not Repaying A Personal Loan?

If you default on a personal loan, there are several financial obligations that you have to deal with. First, the lender will almost certainly try to collect the debt. They may send letters and phone calls to your home, work, and any other phone number they have on file. Second, they’ll report your debt to the credit bureaus, especially if it’s been more than 90 days since you’ve made a payment. Third, if you’re unable to pay back the loan in full, the lender will charge you interest. This could range anywhere from a few hundred to several thousand dollars in additional charges. And last, but not least, the lender can report your debt to a credit agency, which will put a negative impact on your credit score.

In summary, if you’re looking for a loan to make major purchases or pay off existing debt, it may be best to seek out a lender with a minimum credit score requirement. If you have bad credit, it’s still possible to get approved for a loan, but it’ll require a lot of effort and you may have to pay more in interest than usual. For those reasons, don’t expect to get a loan with bad credit unless you’re planning on paying it back in full or have a very good reason for doing so.

And if you’re wondering if you’ll ever be able to get a loan again, let me assure you that you will. Once your credit score improves, you’ll be able to take advantage of lower interest rates and loan offers from reputable lenders. So even if you do have a low credit score right now, don’t lose hope just yet. The right lender and understanding of what caused your low score may be able to help you get back on track. And who knows — maybe even land that loan you’ve been dreaming about.

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You can use a personal loan with no credit history to improve your finances. But, there are drawbacks to this method. Here are the pros and cons of a personal loan with no credit history.

Pros Of A Personal Loan With No Credit History

There are several benefits to getting a personal loan with no credit history. Here are just a few of them.

  • No Credit Check
    • Approval is Based on Your Payment History
    • More Money to Spend
    • More Freedom

    Let’s look at each one.

  • No Credit Check

    Approval for a personal loan with no credit history is based on your payment history. However, credit checks are a good thing because they help protect you from fraudulent activity. But, having no credit check means you’re putting your trust in the lenders, rather than the credit bureaus. While this may seem like a good idea at first, it can also mean that you’re at risk of being scammed. If you’re not careful, you could end up losing a lot of money. So, make sure you’re not being fooled.

    Based On Your Payment History

    When you get a personal loan with no credit history, your approval depends on your payment history. This is a good thing, because it means you can take your time proving your creditworthiness. Lenders can pull up your credit reports to see your payment history. However, your payment history may not be enough to get you approved for a loan. Some lenders need to see proof of steady, ongoing employment. If you’re unable to provide any, you may be denied credit.

    More Money To Spend

    It is no secret that money is very limited for most people. Therefore, when you’re given the opportunity to increase your finances, it’s good to take it. One way of doing this is by getting a personal loan. However, it’s important to understand that these loans are not as readily available as loans with standard credit checks. This is because lenders are more cautious when it comes to approving loans for people with no credit history. It’s also why you’ll usually need to put down a bigger down payment. But, the opportunity to increase your finances is still there if you know where to look.

    More Freedom

    If you’ve ever been denied credit because of your lack of credit history, you know how frustrating it can be. Lenders can make it very difficult for you to get approved for any type of loan. This is because they don’t want to give you money if they think you’ll be unable to pay back. However, with a personal loan with no credit history, this becomes less of a concern. This is because you can’t default on a personal loan. You still have to pay back the loan, even if you’re unable to do so at the end of each month. In some cases, lenders will give you a little grace period, but it depends on the lender and the type of loan.

    Cons Of A Personal Loan With No Credit History

    While getting a personal loan with no credit history has its perks, it also comes with some serious drawbacks. Here are the main ones.

    • Increased Risk Of Scam
    • Unpredictable Payback
    • More Debt

    Let’s take a look at each one.

    Increased Risk Of Scam

    One of the biggest risks with a personal loan with no credit history is scamming. As we mentioned before, lenders have no way of knowing whether or not you’re going to commit fraud. Naturally, they’re going to be extra careful when it comes to approving your loan request. This means that there’s a greater chance of you being scammed. One of the best things you can do to reduce this risk is to thoroughly read reviews online pertaining to the loan broker you’re planning to work with. This will give you an idea of whether or not they’re reputable and whether or not you should trust them. It also helps if the reviews talk about previous clients who were happy with the service.

    Unpredictable Payback

    When you get a personal loan with no credit history, there’s no telling how you’re going to pay it back. You might end up repaying it in installments, or you might never pay it back at all. This is very unpredictable, and this can make it very difficult to budget. If you’re not careful, you could easily end up in financial trouble. This is why most lenders require you to put down a larger percentage of the loan as a down payment. It’s also why they tend to want to see your existing credit cards in order to verify that you have the financial ability to pay back the loan.

    More Debt

    An unavoidable consequence of getting a personal loan with no credit history is that you’re going to be accumulating more debt. This is simply because you have to pay for the privilege of getting a loan. Even if you’re only given the opportunity to increase your finances, you should still try to avoid taking on more debt. The more debt you have, the more pressure you’re going to feel to pay it back. This could lead you into financial hardship if you’re not careful.

    Bottom Line

    Getting a personal loan with no credit history can help improve your finances. However, there are risks associated with this type of loan. Make sure you’re not being fooled by looking at the reviews on websites such as Yelp. Once you’re approved for the loan, make sure you pay it back, even if you’re unable to at the end of each month. But, if you ever find yourself in financial trouble because of this, credit cards can be a way to fix your finances and get back on track.

    The recent global pandemic has forced most of us to adapt to a new way of living that involves working from home and social distancing. Unfortunately, this means that many of our daily needs have changed, forcing us to seek alternative means of financing. While the World Health Organization (WHO) has reported that the economic fallout of the pandemic has been “devastating,” especially in developing countries, it has also been an opportunity for savvy business owners to reexamine their needs and revisit their financial situations. If you’re searching for a personal loan with no credit check but want to be certain that you’re not being tricked, here are some of the telltale signs that you’re being scammed.

    The Loan Provider Is Not A Licensed Lender

    A reliable lender will be registered with the various state and federal licensing agencies that regulate financial services such as the New York State Department of Financial Services. Reliable lenders will also disclose this information on their website.

    Prior to making any online loan applications, be sure to do your research on the lender you are considering working with. You can find a list of federally registered loan providers here and learn more about the state licensing requirements for loan providers here.

    The Loan Provider Requires No Collateral

    In most cases, a lender will require you to put up collateral (such as a car or a home) as security for the loan. However, there are exceptions when it comes to individuals with a good credit score. In these situations, a lender may offer you a loan with only your signature as collateral. This is often referred to as a Signature Loan. To avoid being scammed, be sure to ask the lender about any requirements they may have and understand what they mean by “no collateral.”

    The Loan Provider Provides Online Applications

    In these days of virtual reality and face-to-face meetings being permanently canceled due to the pandemic, it is of paramount importance for a lender to provide an online application process. If they can’t accommodate this need, then they aren’t worth working with. Reliable lenders will include this option on their website.

    Since the majority of people are unable to go to a brick-and-mortar bank during this time, applying for a loan online is a great way for them to meet their financial needs without having to go through the hassle of a traditional loan process.

    Extended Payment Periods And No Early Termination Fees

    Every business owner will be faced with the decision to pay back a loan or not. In a perfect world, we would all prefer to pay back loans as quickly as possible to avoid any additional charges. However, in today’s world, some lenders will string you along for as long as possible before swooping in at the last minute and slapping an extra charge on your bill. This is why it’s so important to look for a lender who is upfront about their policies regarding extended payment periods and who doesn’t try to trick you into paying back more than you actually owe.

    The Loan Provider Is Affiliated With A Lender Or A Bank

    A reputable lender will have no affiliation with any bank or other financial institution. If they are affiliated with a bank, then they are most likely not taking applications from individuals who don’t have a good credit score. The last thing a bank wants to do is loan money to someone who might end up losing their home to foreclosure. In these cases, the lender will generally work with a property lawyer to help negotiate a loan modification with the bank.

    The Loan Provider Advertises In-House Counsel

    In most instances, an in-house counsel will be available to assist you with legal matters regarding the loan. Lenders who advertise in-house counsel are generally well-regarded and trustworthy, although you should always consider the cost of this additional service before making a decision.

    The downside to in-house counsel is that they are usually restricted to working on loan modifications and foreclosure rescue, which means that they might not have the broad financial services experience that a larger, independent legal firm would have. In-house counsel is also responsible for billing you for their services, so be sure to factor this cost into your financial calculations.

    The Rates Are Unreasonably High

    The price you will be asked to pay for a loan is referred to as your loan interest rate. In the perfect world, we would all like to believe that there is a lender out there who can help us with our financial needs at an affordable rate. Unfortunately, that’s not often the case. Unreasonably high loan interest rates are a clear indication that you are being scammed. Although the lending industry has largely recovered from the pandemic, it still pays to do your research and know the terms and conditions of your loan before committing.

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