Most standard lenders won’t give loans to people with bad credit or no credit history without a cosigner. A cosigner shares your responsibility to pay back the loan and must do so if you don’t.
Students and refugees often need a cosigner because they have little or no credit background in the United States.
Most of the time, people who need a cosigner the most can’t find one. Students and refugees may not know any US citizens with good credit, so they have to find other ways to get loans without a cosigner.
In this guide, we talk about what kinds of loans you might be able to get if you don’t have a credit background or a cosigner, which companies you should look into, and more.
There are four ways to get a loan without a cosigner or good credit.
Getting a loan can be hard if you are a student, a foreigner, or anyone else who has trouble finding a cosigner and has bad or no credit. But if you do your homework and get the right help, you can get a loan even if you have bad credit.
Online personal loan lenders
Secured loans
Credit unions give loans
Payday loans
Let’s dive in:
1. Online Personal Loan Lenders
There are online lenders, like the ones below, that give personal loans to people like students and foreigners who don’t have a cosigner and don’t have much or any credit history.
Online lenders look at more than just your credit score, while banks usually only look at your credit score. They look at how much money you make, where you work, and why you need the loan. They also offer low-interest rates.
Banks and other online lenders are also in the same market as online lenders. If you do your study and find the right company, you might be pleased to find that you not only get a loan but also one with a good interest rate and terms for paying it back.
2. Loans with collateral
Even if you don’t have a cosigner, you might have something valuable that you can use to get a loan.
A cosigner is an extra layer of safety that can help you get a loan. A protected loan, on the other hand, uses things like cars, boats, and motorbikes to make up for a lack of credit history.
For example, if you are a new foreigner or a student, you may not have had enough time to build the kind of trust that someone needs to cosign for you. You may, however, have a valuable thing that you can put up as collateral to get a loan.
In a way, this important thing acts as a co-signer. It means you agree to give up the item if you don’t pay back your loan.
3. Loans from credit unions
Credit unions can help people who are having a hard time getting a cosigner. Credit unions are made so that people with similar personalities and financial goals can join together to form a group that helps them.
If you are a newcomer from a certain country or culture, there are credit unions all over the United States that can help you with your financial problems.
If you apply and are chosen as a member, you can get cash help from a group of people who are like you in many ways.
4. Payday Loans
If you can’t find a cosigner, you could get a payday loan, but it’s a very risky choice.
There is some truth to the idea that payday loan companies are a quick and easy way to get cash on the spot. You can leave with cash in hand if you have your driver’s license, your Social Security card, and a check with a date on it.
But because the interest rates on payday loans are so high, getting one can be like stepping into quicksand. They give you the choice of a quick fix so that they can get you into more debt.
Payday loans should be avoided at all costs if at all possible.
Who do most people ask to be cosigners?
A cosigner is someone who agrees to share responsibility for your loan with you. If you don’t pay the bank or other financial institution, he or she is responsible for doing so. Also, if you both don’t pay back the loan on time, it could hurt his or her credit score.
Also, a cosigner is almost always someone you know well and trust.
Cosigners are usually people you know and trust, like family or friends. They are people who will take your situation into account and are willing to take some risk so that you can get a loan.
A cosigner with a good credit history can help you get a loan with a cheaper interest rate, get a second personal loan, or get a higher loan amount. Their good credit score makes up for your bad credit past (or lack of one), and a lender looks at both when deciding if you can get a loan and what kinds of loans you can get.
Groups that have trouble getting cosigners
Not everyone has an easy time finding a cosigner, though. Two groups that have the most trouble are: Don’t feel bad if you belong to either of these groups—you’re not alone!
1. Immigrants
Immigrants are usually new to the U.S., so they haven’t had much time to make friends with people who have good credit.
They just moved to the United States, don’t have their own credit history, are trying to set up a life, and haven’t yet built strong, trusted ties with people who might be willing to cosign for them.
A cosigner must have a good credit background in the US and be ready to take a chance on you. If you’ve only been in the US for a short time, it’s possible that you haven’t had time to meet people who might be ready to cosign for you.
2. Students
Since most students are young, they haven’t had much time to build up a credit background. Most teens aren’t given loans or credit cards because they are seen as too careless or dangerous. This makes it hard to build up a FICO score.
Students are often the ones who need loans the most, which is strange. They are getting ready for a job, but they aren’t making much more than the minimum wage for part-time work. Students need cars, places to live, and financial help, all of which need payment plans.
If a student has never had to pay back credit before, it will be hard to show an investor that they can handle the duty of a loan.
