How to Get a Personal Loan with No Cosigner & Bad or No Credit
Posted by Rohit Mittal in Loans | Updated on May 23, 2023
Most traditional lenders require cosigners for loan applicants with bad credit or no credit history. A cosigner shares responsibility for repaying the loan and has to make payments if you fail to do so.
Students and immigrants, in particular, often have to depend on a cosigner, as they tend to have little or no credit history in the US.
Unfortunately, those who need a cosigner the most are often unable to find one. Students and immigrants might not know US citizens with good credit and are forced to find alternatives that don’t require a cosigner.
In this guide, we go over what types of loans you may be eligible for if you have no credit history and no cosigner, specific lenders to check out, and more.
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4 Ways to Get a Loan Without a Cosigner & Bad or No Credit
If you are a student, immigrant, or anyone else struggling to find a cosigner while also having bad or no credit history, the task of getting a loan can be daunting.
But with research and the right help, you can secure a loan with no credit. Read on or click an option below to jump down:
Let’s dive in:
1. Online Personal Loan Lenders
There are online lenders (such as those highlighted below) that offer personal loans to those with no cosigner and limited/poor credit histories—such as students and immigrants.
Whereas banks often primarily consider your credit score, online lenders take into account other aspects of your life. They look at your income, employment status, and reasons for needing the loan while also offering competitive interest rates.
Online lenders have to compete with banks and other online lenders. If you do your research and find the right company, you could be surprised that you not only get a loan but one with a good interest rate and repayment terms.
2. Secured Loans
Although you may not have a cosigner, you may have something of value that can act as collateral for the loan.
Whereas a cosigner acts as extra protection to help you become eligible for a loan, a secured loan uses possessions like cars, boats, and motorcycles to make up for a lack of credit experience.
As an immigrant or student, for example, you may not have had time to form the trusting bonds that are required for someone to cosign for you. You may, however, have an item of value that you can risk to secure a loan.
In essence, this valued possession acts as a cosigner. It means you are willing to have that item repossessed if you default on your loan.
3. Credit Unions Loans
Credit unions can be a direct antidote to those struggling with finding a cosigner. Credit unions are designed for people who share similar characteristics with similar financial interests to join a collective group that supports them.
If you are an immigrant of a certain ethnicity, there are credit unions across the United States that are designed to accommodate the financial handicaps that come with your circumstance.
If you apply and are accepted as a member, then you can receive financial assistance from a fellowship that shares common demographic characteristics.
4. Payday Loans
Payday loans are an option—but a very risky one—for those having trouble finding a cosigner.
Payday loan providers sell themselves as a quick and easy stop for cash on the spot, and there is some truth to that. With a driver’s license, Social Security card, and a post-dated check, you can leave with cash in hand.
However, with extremely high interests rates, relying on payday loans can be like stepping in quicksand. The quick fix option is exactly what they provide to hook you into further mounting debt.
If at all possible, you should avoid payday loans however you can.
3 Online Personal Loan Lenders That Don’t Require Cosigners
If you choose to go the online lender route for getting a personal loan, you’ll have a few options, including:
Here’s a closer look at each:
Stilt is an online lender that offers personal loans to students and immigrants with a lack of credit experience.
Stilt provides loans to international students and working professionals in the U.S. (F-1, OPT, H-1B, O-1, L-1, TN visa holders) at rates lower than any other lender.
Stilt considers factors other than credit history when determining eligibility, such as employment/employability, education, and financial behavior.
Another great thing about Stilt is that it reports your monthly payments to the credit bureaus each month, helping you build your credit score as long as you make on-time payments.
Stilt’s loan application process takes less than 5 minutes and you can receive an offer within 24 hours.
Avant is a competitive online personal lender that can disburse money to your bank account within a day if you are approved. The only issue is Avant has a minimum credit score of 600. Those without any credit history or credit scores below 600 may not be eligible.
Badcreditloans.com is another option for those with bad credit or no credit history at all. The company is not a lender itself but connects you with bad credit loan offers that you may be eligible for. If you do not have a cosigner, Badcreditloans.com is a potential avenue to explore.
Who Do People Typically Use as Cosigners?
A cosigner is a person assuming co-responsibility for your loan. He or she is liable to make payments to the bank or financial institution on your behalf, in case you fail to do so. In addition, his or her credit score can be damaged if you both fail to make payments on the loan.
With that being said, a cosigner almost always has to be someone you have a close relationship with.
Cosigners tend to be people you trust like family or friends; people who will take into account your situation, and be willing to take on a bit of risk so that you can be approved for a loan.
A cosigner with a strong financial background can help you secure a loan at a lower interest rate, qualify for a second personal loan, or become eligible for a higher loan amount. Their good credit score offsets your poor credit history (or lack thereof), and a lender takes into account both when they decide whether you are eligible or not as well as what loan options you qualify for.
Groups That Struggle to Secure Cosigners
Unfortunately, not everyone is able to easily secure a cosigner. Two of the groups who struggle the most include:
If you fall into either of these categories, don’t feel bad—you’re not alone!
Immigrants are new to the United States and usually have not had time to create a network of people with strong credit reports.
They’ve just arrived to the States, have no credit history of their own, are attempting to set up a life, and have yet to create strong, trusting relationships with potential cosigners.
A cosigner has to be someone with a US credit history, while also being someone willing to take a risk on you. If you’ve only been in the US a short while then it’s quite possible you haven’t had a chance to socialize and network with people who may then become willing to cosign for you.
Students tend to be young meaning they have had little time to build a credit history. Most teenagers are deemed too irresponsible or risky to be given loans or credit cards, making it hard to build up a FICO score.
Ironically, students tend to be in most need of a loan. They are training for their careers and are not pulling in much more than a part-time minimum wage. Students need cars, residences, and student aid which require payment plans.
If a student has not had to pay off any credit previously, then it will be hard to convince a lender that you will be able to hand the responsibility of a loan.
Luckily, there are international student loans without a cosigner that students can turn to that don’t require them to pass a credit check.