There are 26 million adults in the U.S. who are “credit invisible,” meaning they have no credit history with the three leading credit reporting agencies. Another 19 million are “unscorable,” which means they do not have sufficient credit to establish a credit score.
Your credit score determines whether you receive approval for a loan and how much interest you will pay on that loan. When you have bad credit, low credit, or no credit score, getting a loan of any size is difficult.
If you have dreams of buying a car, repairing your home, or taking the family on vacation, there is a way to get a personal loan with no credit history. If you’ve never heard of a personal loan, keep reading. We will share the benefits of this loan and how to get approval, even with a bad credit history.
Personal loans allow you to use the money any way you choose. Unlike a car loan or a mortgage, where you are locked into a specific purpose, you can use the money to pay off debt, take a vacation, repair your home, or any other purpose.
The loan is unsecured, meaning the lender does not require you to put up collateral. Once you receive approval, you get the total amount of the loan upfront. You repay the loan by making monthly payments.
A personal loan is one way to build a credit rating. Because it is a bank loan, your consistency in making regular, on-time, monthly payments is reported to the three major credit bureaus—Experian, Equifax, and TransUnion. The downside is that if you do not make your payments on time, you damage your credit rating.
Your credit reports and scores are what lenders use when deciding whether they will approve you for a loan. The higher your credit score, the easier it will be to qualify for credit. Check your credit reports at least annually to ensure the information is accurate.
Lenders classify FICO scores as follows:
When applying for a loan, credit card, car loan, or mortgage, the lender looks at your score to determine your risk. Your credit score is a compilation of your payment history, length of credit history, outstanding balances, applications for new credit accounts, and the type of credit accounts you have open.
If you want to improve your credit score, pay your bills on time. Even bills like utilities and telephone that do not appear on your credit score may be turned over to a collection agency, which will hurt your credit.
If you want your payment history for your phone, utilities, and streaming service to appear on your credit report, sign up for Experian Boost. Many people who take this step see an increase in their credit score of about 13 points.
If you have outstanding credit card balances, pay down the balance to decrease your income to debt ratio. Do not close the accounts, as that causes more damage to your score than having a credit card with a low or paid-off balance.
Do not apply for a lot of credit, as that will put a lot of hard inquiries on your credit. Hard inquiries lower your score. If you receive a loan rejection, you can request a copy of your credit report for free within 60 days of the denial.
Rather than running bank to bank, the easiest way to find a lender when you have invisible credit or a low credit rating is to use a service like Fast Loan Direct. They provide free services, so the only fees you pay are those the actual lender charges.
Here are some examples of possible lending companies:
This company offers an annual percentage rate (APR) of 3.09% to 35.99% for qualified consumers. They require a credit score of 600 but accept applicants with no credit history. There is no early payoff penalty.
They have a quick turnaround, with around 99% of borrowers receiving funds the next business day. They charge an origination fee of 0% to 8% of the loan and charge $10 if you want paper copies of the loan agreement. Late fees are either $15 or 5% of the past due amount, whichever is higher.
It is essential to realize that loan agreements are contracts. Make sure you read all the loan terms and do not sign until you understand.
OneMain approves loans for people with poor to fair credit, with no early payoff penalty. The company charges an origination fee of $25 to $500, or a percentage ranging from 1% to 10% for qualified consumers, depending on your state. If you are late making your payment, there is a late fee of $30 or up to 15%, depending on your state.
The company allows you to prequalify with a soft credit check. Following approval, you receive funds within 1-2 business days. A real bonus is the ability of the borrower to select the date their bill is due each month.
With a loan from Avant, qualified consumers will pay an APR of 9.95% to 35.99% but can receive a lower interest rate if you apply for a secured loan using the title of your car as collateral. This option is available in 40 states.
The company approves loans with scores below 600. There is no penalty for paying off the loan early, and the origination fee is up to 4.75%. If you are late making a payment, there is a $25 late fee after a 10-day grace period.
With this lender, qualified consumers will pay an origination fee of up to 6% and an annual percentage rate of 7.99% to 35.99%. They approve applicants with a score of 580 or higher and allow a soft inquiry to prequalify.
There is no penalty for the early payoff of the loan.
To receive a loan, you must have an annual income of at least $20,000, a verifiable bank account in your name, a Social Security number, and a U.S. federal, state, or local government photo ID.
The above is only a sample of lenders providing personal loans with bad or no credit history. Learn about the loan you qualify for and available lenders through Fast Loan Direct.
We offer loans from $100 to $35,000 with APR rates from 5.99% to 35.99% for qualified consumers. We have no hidden fees, and it takes five minutes or less to apply. Contact us now by going to https://fastloandirect.com for more information and get your loan started today.