Getting A loan With no credit


Couple using a tablet computerMost of us find ourselves strapped for cash as a student or when we start our first job.

Here, we look at how to take out your first loan.

Loans for young people

There are various options when picking a loan. As a student, the loan with the lowest interest rate will be a student loan, which is repayable once you start working.

Aside from this, there are personal loans available from a variety of lenders. However, before picking one, consider how much you really need to borrow and what repayments you can afford to make each month. After all, it's vital that you don't overstretch your finances.

You might, for example, want a loan to buy your first car, or fund a course. By taking a loan from a bank, you'll pay back the amount you've borrowed plus interest on the capital sum. If you don't stick to the repayment plan, you'll face charges, so make sure you can meet the cost.

Remember that the higher the interest the longer it will take you to repay the loan, and the more it will cost you.

Loans for borrowers with a poor credit rating

There is a big difference between 'poor credit' and 'no credit'. However, they both make getting loans with the lowest rates tricky. If you have no credit history behind you because you have never taken out a loan or any form of credit before, you may struggle to get a loan.

Alternatively, if you have a poor credit rating, you may have missed repayments in the past, or even have a County Court Judgement (CCJ) or bankruptcy against your name.

However, neither situation means that lenders will automatically slam the door on you - but it will mean your options are limited. You are likely to face higher interest payments, and access to smaller loans. The best deals are reserved for borrowers with sparkling credit histories, and a history of making reliable repayments.

However, there are lenders that offer 'bad credit loans' to people who seem a greater risk because of their poor credit history. But these come with higher rates and lower limits.

Remember that the higher the interest the longer it will take you to repay the loan, and the more it will cost you.

How young people can improve their credit rating

There are simple ways to improve your credit score. These include making sure your name is on the electoral roll when your local authority sends you details of this. If it's not on this, you're unlikely to get any credit.

Also, space out your applications for credit as each will leave a 'footprint' on your file - and if you're rejected, this makes the next lender less likely to accept you. When you do get credit, make sure you keep up repayments to gradually rebuild a tarnished credit history.

Don't despair, as remember that your credit history isn't the only consideration when providers decide to lend you money. They also take into account your job, salary, for example, along with any other assets you might have.

Moneysupermarket is a credit broker – this means we’ll show you products offered by lenders. We never take a fee from customers for this broking service. Instead we are usually paid a fee by the lenders – though the size of that payment doesn’t affect how we show products to customers.

Interesting facts

  • A "short refinance" is a transaction in which the lender agrees to refinance the borrower's home for the current market value, in effect making it more cost effective for the borrower. The lender agrees to replace the lenders current loan with a new one and pays off the difference. This new loan typically has a lower balance and borrowers...
  • "What prevents poor people from getting ahead? Banks refuse to give credit without collateral. Where commercial banks see insolvency, Nobel Prize–winning economist Muhammad Yunus sees opportunity. His groundbreaking Grameen Bank was built on the radical notion that if you loan poor women money within the context of peer support, not only will...

Additional information


How to Get a Car Loan with Bad Credit and No Cosigner
How to Get a Car Loan with Bad Credit and No Cosigner
Getting Car Loans With Bad Credit And No Money Down
Getting Car Loans With Bad Credit And No Money Down
Loans With No Credit Check
Loans With No Credit Check
Personal Finance: How to Guide on Budgeting, Saving Money and Getting Out of Debt (Fixing Credit, Budgeting, Saving Money, Getting Out of Debt) (Personal Finance Series Book 1)
eBooks (Provident Wellness)
The SBA Loan Book: Get A Small Business Loan--even With Poor Credit, Weak Collateral, And No Experience (SBA Loan Book: The Complete Guide to Getting Financial Help)
Book (Adams Media)
  • Used Book in Good Condition
How to Get a Loan With No Credit
How to Get a Loan With No Credit
How to Get a Home Loan With No Credit
How to Get a Home Loan With No Credit
How To Get A Bad Credit Car Loan With No Money Down | Car
How To Get A Bad Credit Car Loan With No Money Down | Car ...