LOS ANGELES, June 13, 2022 (Newswire.com) - Building credit helps borrowers access great loan terms, buy homes, and more. But everyone starts with no credit and has to work on building it up to access more financial opportunities. Fortunately, there are plenty of loan options for first-time borrowers. These can help the borrowers get the funds they need and start building their credit history. This article will help borrowers learn how to get a loan with no credit by diving into five loans for first-time borrowers.
1. Cash advances
Cash advances are short-term, small-dollar loans that can tide borrowers over until their next paycheck. These loans are usually due in two to four weeks, on the borrower's next payday. Many cash advance lenders approve borrowers with all credit score levels. They'll look at factors besides credit score, like income, employment history, and current debts. So, borrowers with no credit can still get approved.
When the loan is due, the borrower will pay back the loan plus interest. The borrower can also roll over the loan for two to four more weeks, but they should try to repay the loan as soon as they can to avoid paying more in interest and fees.
2. Installment loans
Installment loans are lump sums of money that borrowers can pay back in fixed payments of principal and interest. Borrowers often use installment loans to stock their emergency funds, refinance other higher-interest debts, and finance big projects. Some lenders will consider income, assets, and employment history in addition to credit score. This can help borrowers get installment loans at affordable rates with no credit.
3. Title loans
Title loans let borrowers use their car title as collateral for a loan if they own the vehicle outright. With these loans, the lender will appraise the borrower's vehicle, then offer them 25 to 50% of its value as a loan. Borrowers can get the loan as soon as that same day, and continue driving their car while repaying the loan. Since title loans are secured by collateral, they are considered less risky to the lender than unsecured loans. So, it may be easier for borrowers with no credit to get approved.
4. Lines of credit
Lines of credit are flexible loans that let borrowers take out as much as they need, up to a specified credit limit. They can then pay back the borrowed amount all at once or at their leisure. Lines of credit can work well for borrowers who need to cover emergency expenses or pay for projects with unpredictable expenses, such as home improvement projects. Many lenders offer lines of credit for no credit, so first-time borrowers may still qualify for this type of loan.
5. Pawn shop loans
Pawn shop loans are short-term secured loans offered by pawn shops that usually last about 30 days. These require no credit checks. Instead, the borrower can offer a valuable item as collateral. The pawnbroker will appraise the item, then give the borrower loan terms. The borrower can then leave the item with the pawn shop as collateral and receive the funds they need. The borrower can get their item back after successfully repaying the loan.
The bottom line
Borrowers with no credit have plenty of options for getting their first loan. From cash advances, installment loans, and lines of credit to title loans and pawn shop loans, there are various secured and unsecured loans to choose from that come with less strict credit score requirements. First-time borrowers should weigh their needs and budget to decide the right loan type for them. Then, they should shop around with multiple lenders and compare terms to get the funds they need at a good rate.
Notice: Information provided in this article is for information purposes only. Consult your financial advisor about your financial circumstances.
Source: Advance America