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How To Get a Loan as an 18-Year-Old with No Credit History

So, you're 18 and need a loan, but you have no credit history to your name. It might seem like a tricky situation, but don't worry. You're not alone in this boat. In this guide, we'll show you how it's entirely possible to secure a loan and begin building your financial future. 

Key Takeaways

  • Yes, 18-year-olds can secure loans, although options may be limited due to the absence of a credit history.
  • Online lenders specialize in assisting 18-year-olds without credit histories, offering hope for loan approval.
  • Various loan types are available for 18-year-olds, including installment loans, secured loans, peer-to-peer loans, co-signer loans, credit union loans, and credit builder loans.
  • Borrowing at 18 offers quick funds and a chance to build credit, but it comes with potential limitations on loan amounts and the risk of accumulating unnecessary debt.

Can an 18-Year-Old with No Credit History Get a Loan?

Yes, if you are 18 with no credit history, you can get a loan. The loan types and the loan terms will be limited, though.

We all know that when it comes to borrowing money, lenders usually peek into our credit history to determine if we're worthy of their trust. But what if you haven't had the chance to build a credit history yet? Does that mean you're out of luck when it comes to loans? No. There is hope in online lending.

Believe it or not, there are online lenders out there who specialize in offering loans to folks who haven't yet dipped their toes into the credit pool. These lenders take a different approach, looking at factors other than credit scores to decide if they should approve your loan application. 

To convince lenders that you're responsible enough for a loan, you'll need to show them a few things:

  • Steady employment history. First off, they'll want to see that you have a reliable job and can manage your income responsibly.
  • Proof of income. This demonstrates how much you earn, helping them figure out how much you can comfortably repay.
  • Valid ID. You'll need a state-issued ID or driver's license to confirm your identity.
  • Active checking account. It's essential to have an active checking account in your name. They'll want to know where your income is deposited.

Types of Loans Available to an 18-Year-Old with No Credit History

Let's dive into the types of loans that an 18-year-old with no credit history can actually get approved for.

1. Installment Loans

If you're in need of a quick financial solution, online installment loans might be your go-to option. These loans are relatively easy to get approved for, and the application process is typically speedy. You can often receive a decision within a short time frame.

The borrowing limits for installment loans vary from state to state, so make sure to check your state's lending limits. While you might not secure a massive sum, it's usually enough to cover essential expenses or unexpected emergencies.

2. Secured Loans

Secured loans require you to put up collateral, which serves as a safety net for the lender. Collateral can be an asset like your car, savings account, or even valuable possessions. By providing collateral, you reduce the risk for the lender, making approval more likely.

However, keep in mind that if you fail to repay the loan, the lender has the right to take possession of the collateral. So, it's essential to borrow responsibly and make your payments on time.

3. Peer-to-Peer (P2P) Loans

P2P lending platforms connect borrowers directly with individual investors. These loans can be a viable option, especially if you have a compelling reason for borrowing. While your credit history is still a factor, some P2P lenders may be more lenient with younger borrowers who lack extensive credit records.

4. Co-Signer Loans

Having a co-signer, typically a family member or close friend with good credit can significantly improve your chances of loan approval. The co-signer essentially vouches for your ability to repay the loan. Keep in mind that if you miss payments, it will negatively affect both your credit and your co-signer's credit.

Related: Pros and Cons of Co-Signing a Loan

6. Credit Union Loans

If you're a member of a credit union, you might have access to more favorable lending terms. Credit unions often consider your financial history and personal relationships when reviewing loan applications. They might be more understanding of your limited credit history and offer lower interest rates.

7. Credit Builder Loans

These loans are tailor-made to support 18-year-olds looking to build a credit history.

Here's how they work: When you apply for a credit builder loan, the lender sets aside a modest sum in a savings account or a certificate of deposit. You won't be able to access this money until the loan is completely paid off.

The magic happens as you diligently make your monthly payments. Each payment you make is reported to the credit bureaus, showcasing your responsible financial behavior. Over time, this positive payment history begins to paint a picture of your creditworthiness.

How Much Can an 18-Year-Old Borrow?

There is no set limit or amount but be prepared for a smaller amount. Lenders often consider it risky because there's no credit score to evaluate your borrowing history. As a result, you might not be approved for the highest loan limit.

When it comes to loan options, different lenders may have varying limits, but it's essential to be realistic about your borrowing capacity. Your income plays a significant role in this decision. Lenders want to ensure you can comfortably manage your loan payments.

While specific limits may differ depending on the lender, it's advisable not to expect approval for the maximum loan amount, especially if you're just starting to build your credit history. Instead, consider applying for an amount that aligns with your income and budget, ensuring a smoother repayment process.

Pros and Cons of Getting a Loan at 18

Getting a loan at the age of 18 can be a big step in your financial journey. It has its advantages and some things to be cautious about.


  • Quick Access to Funds. When a lender approves your loan application at 18, you can often expect the funds to hit your checking account as soon as the next day. This speedy access can be a lifesaver for addressing immediate financial needs.
  • Building Your Credit History. Taking out this type of loan is like taking your first step into the world of credit. Making consistent, on-time payments can boost your credit score over time. This positive credit history will open doors to better loan offers and lower interest rates in the future.


  • Limited Loan Amounts. Being 18 often means limited or no credit history. As mentioned above, you might qualify for a relatively small loan amount, which might not cover your larger expenses.
  • Risk of Unnecessary Debt. While loans can be a helpful financial tool, they can also lead to unnecessary debt if not managed properly. It's crucial to budget for repayments and only apply for loans that align with your ability to repay comfortably.

Taking out a loan can be a valuable way to build your financial future as long as you do it wisely and within your means. Explore your options and borrow wisely to get your financial journey started on a good path!

Related Frequently Asked Questions

If you are researching loans for 18-year-olds, here are some frequently asked questions on this topic.

What Are Loan Alternatives for 18-Year-Olds with No Credit History?

Before diving into a loan, it's wise to explore cost-effective alternatives. Here are some options to consider:

  • Borrow from Family or Friends. Building a lending circle with trusted family members or friends can be a supportive approach. You may also choose to borrow directly from someone you know and agree on repayment terms. The advantage here is that such arrangements often come with no interest, and they typically won't impact your credit score.
  • Utilize a Student Credit Card. If you're anticipating an income soon, you can leverage your student credit card. It not only provides a source of funds but can also help you establish your credit history early. It's essential, however, to use the card responsibly, only charging what you can comfortably repay.
  • Explore Part-Time Employment. If you do not need cash urgently, consider taking up a part-time job. You have various options, including remote work like freelancing, affiliate marketing, or traditional positions in restaurants or grocery stores. A part-time job not only provides income but also offers valuable work experience.

Remember, there are alternatives to loans that can help you manage your finances effectively while minimizing debt.

Do I Have to Have a Cosigner If I Don't Have a Credit History?

Many online lenders, like SimpleFastLoans, do not require a cosigner if you have proof of income, an employment history to reference, a state-issued ID, and an open checking account. 

While it is an option, sometimes, it's not necessary all the time. You could get approved all on your own and start your credit history if you meet the above criteria.

What If I Don't Have a Checking Account?

Ideally, if you are 18 and receiving a paycheck, you should have an active checking account. Most lenders will require that the account be established for some length of time. In other words, it doesn't do much to help get a loan approval if you open the checking account the day before you apply for your loan.

What If I Can't Make a Payment on My Loan?

The worst thing you can do is just skip a payment without contacting your loan company. If you find yourself in a situation where you don't have the funds to make your monthly payment, reach out right away. The more you delay, the worse the situation could get. Most lenders will consider restructuring your loan payments or postponing a payment. 

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