Getting a personal loan at 18 years old can be difficult since you might not (yet!) have a solid enough credit history or a high enough income. The first step to finding loans for 18-year-olds is to find lenders that are willing to work with young borrowers. You could also consider getting a cosigner for easier approval.
Compare personal loans for 18-year-old applicants
If you live in a province where 18 is the age of majority (in Alberta, Manitoba, Ontario, Prince Edward Island, Quebec or Saskatchewan) below are five options you can consider when looking for loans for 18-year-olds:
1. Unsecured personal loans
You may be able to apply for a personal loan with an online lender if you can show proof of steady employment and a reasonable income. You could also have better luck if you apply for a bad credit loan or a no credit check loan with an online lender. Just make sure that your interest rate is reasonable.
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2. Loan from your bank
You might be able to get around your lack of credit history by applying for a loan with your current bank. Banks are sometimes more willing to let you borrow money if you’ve been with them for a long time. This is especially true if you have some savings set aside, own multiple accounts and pay your bills on time.
3. Credit-builder loans
Some lenders offer credit-builder loans that are designed to help build up your credit history. These loans let you borrow as little as $100 or as much as a few thousand dollars – and any payments you make on them will help to build up your credit score. This can help you qualify for larger amounts of financing in the future. The catch with credit-builder loans is that you can only get the money in the future, at the end of the term, after you’ve already made all your payments.
4. Secured loans
You may be able to use valuable assets such as your vehicle or investments to secure loans for 18-year-olds. Just be aware that your assets can be repossessed if you fail to make your payments.
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5. Pay advance apps
Pay advance apps offer small, short-term loans that typically must be paid back with your next paycheque.
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6. Borrowing with a cosigner
Some lenders will allow your parents, other family members or friends to cosign a loan for you if they don’t mind putting their credit score on the line. This lets you use their high score to secure lower interest rates and better terms for your loan. Just keep in mind that the person who cosigns will be responsible for paying back your loan if you default on payments.
How can I find a competitive loan as an 18-year-old?
Follow these steps to increase your chances of getting approved for a loan if you’re 18 years old.
Step 1: Get a copy of your credit report
You can request a copy of your credit report from Canada’s major credit bureaus: Equifax and TransUnion. It’s also possible to use a credit score app such as Mogo credit score. Having an idea of what your credit history looks like in advance will help you determine which lenders you may qualify to borrow from. Learn more about credit scores.
Step 2: Provide supporting documentation
Applying for loans for 18-year-olds may require you to submit proof of consistent employment or income. You may also need to show that you don’t have any other outstanding debts or financial obligations that could prevent you from paying back your loan. The more you can make the case for why you deserve the money, the better.
Step 3: Look for a cosigner
You don’t necessarily need a cosigner to get a loan as an 18-year-old, but it could help you get the leverage you need to borrow higher amounts at more competitive rates than if you applied alone. Reach out to family members and friends that have a strong credit history to find out if they would be willing to help you out. This will also help you narrow down your choices since not all lenders allow cosigners on personal loans.
Can I get a loan without a cosigner at 18?
You won’t get a loan without a cosigner from your typical personal loan provider. However, some alternative lenders offer loans designed for students that consider factors such as your earning potential rather than your credit score. And if you’re in school, you can also use part of your student loans to cover living and personal expenses after you’ve paid your school’s tuition and fees.
Step 4: Compare lenders offering loans for 18-year-olds
You should always compare multiple lenders when applying for loans for 18-year-olds. This will allow you to compare the rates and terms you’ll get with several providers, which can help you make sure that you lock in the best deal.
Compare these features to find the best loan for 18-year-olds:
Interest. Check whether the interest rate is fixed or variable and how competitive it is compared to other similar loan products.
Loan amounts. Find out how much money you can qualify for and borrow only what you need to prevent overspending.
Fees. There are different types of fees you can be charged, ranging from establishment fees to monthly fees and early repayment fees. Find out what fees are associated with your loan before signing on the dotted line.
Loan terms. Lenders will offer different loan terms – which will affect the size of your monthly payments. Find a term that fits your budget but doesn’t leave you paying back your loan for more than three to five years wherever possible.
Step 5: Get pre-approved
Many lenders allow you to apply for pre-approval by filling out a simple application. This will let you know how much you qualify to borrow and at what interest rates without needing you to submit to a hard credit check. You’ll want to avoid hard credit checks wherever possible, especially if you’re applying with multiple lenders. This ensures that you don’t lose points on your credit score unnecessarily, which could affect your chances of getting approved.
Step 6: Fill out an application
Be honest and accurate when you’re filling out your application. One of the top reasons people get rejected for loans is because they make mistakes in the application. Double-check your personal and financial details a few times to make sure there are no inconsistencies.
If you’re approved, it’s also important to read the terms and conditions of your loan before you sign your contract. If you’re having trouble understanding the conditions of your loan, reach out to your lender for clarification or ask a friend or family member for help.
How old do you have to be to get a loan?
You need to be the age of majority in your province or territory of residence to qualify for a loan:
Age of majority
Province of residence
18 years old
Alberta, Manitoba, Ontario, Prince Edward Island, Quebec and Saskatchewan.
19 years old
British Columbia, New Brunswick, Newfoundland, Northwest Territories, Nova Scotia, Nunavut and Yukon.
Loan payment calculator
Not sure if you can afford monthly loan repayments? Find out using our loan payment calculator.
Enter the amount you want to borrow under Loan amount.
Write the loan term in years (not months) under Loan terms.
Enter the loan’s interest rate if there are no fees under Interest rate. Otherwise, write the annual percentage rate (APR), which includes interest and fees.
Hit Calculate.
Review your results.
Tips for getting loans for 18-year-olds
Show that you have savings. If you have money set aside in a savings account, RRSP, RESP or TFSA, it may be easier to qualify for a loan as an 18 year old.
Offer a deposit. Having a deposit shows you’re in a good financial position, especially if you’re financing a vehicle. The larger the deposit, the easier it may be to get approved for financing.
Get a letter from your employer. A letter from your employer stating the security of your job could help your application, even if you only work part time or casually. It may also be helpful to provide proof of any other income streams you have.
Apply for a lower amount. Your monthly payments should fit within your budget. Only ask to borrow money you can pay back on time. Asking for more could lead to overspending.
Loans for 18-year-olds with no credit history
If you’re 18, chances are you don’t have a credit history – you weren’t old enough to build a credit score until this year. In most cases, you’ll likely need to bring on a cosigner to qualify for traditional loans for 18-year-olds. Otherwise, you might want to consider alternative lenders.
You can also try taking a little bit of time to build up your credit history first before applying for a loan. One smart way to build credit is to use a secured credit card, which works just like a typical credit card and is easier to be approved for than other types of credit.
Benefits and drawbacks of loans for 18-year-olds
Pros
Easy access to funds. Loans for 18-year-olds can help you get access to the financing you need in a short time frame.
Build up your credit history. You’ll start building up your credit score as soon as you begin making repayments on your loan.
Invest in your future Getting loans for 18-year-olds can help you afford the assets you need to get a head start on your future.
Cons
Limited loan amounts. If you have a limited credit history, you may only be eligible for very small loan amounts (less than $1,000 in some cases).
Potentially high rates. You probably won’t be eligible for a loan with low rates and favourable terms until you have a strong credit and employment history.
Risk of getting into debt. You could end up taking on more debt than you can handle — especially if you lose your job or come up against some unexpected financial hardship in the future.
How to apply for a loan at 18 years old
You can follow these steps to apply for loans for 18-year-olds
Get an application form. Visit your bank in person or go to the main application site for the provider you’re interested in to apply.
Fill out application details. Fill out personal details such as your full name, address, email and phone number to start your application.
Provide financial details. Input details about your income, debts, assets and other necessary financial information.
Submit relevant documents. You could be required to show bank statements, employment letters, tax assessments and other documents to support your application.
Submit to a credit check. You’ll usually have to submit to a personal credit check to get approved for loans for 18-year-olds.
Review final details. Read the fine print of your personal loan and make sure you understand the terms and conditions before you hand in your application.
Click submit. Once you’re ready to apply, click submit on your application or call your loan provider directly to apply over the phone.
Eligibility requirements
While requirements may vary between different lenders, you’ll usually need to meet the following requirements to apply for loans for 18-year-olds.
Be 18 years of age, or the age of majority in your province or territory
Be a Canadian citizen or a permanent resident with a valid Canadian address
Meet any income requirements and have proof of income
Required documents
You will usually need to provide the following:
Your personal details.This includes your full name, date of birth, address, email address, phone number and Social Insurance Number (SIN).
Your employment details.You may need to provide your employer’s name and contact information.
Proof of income.You may need to submit pay stubs or bank statements to provide proof of your income.
Your banking details. You will need to provide the name of your bank, the branch address and transit number and your own personal bank account number.
Bottom line
Getting loans for 18-year-olds can be tricky if you don’t have a solid credit history or high income to fall back on. That said, there are many ways you can still apply and get approved for loans for 18-year-olds. Find out how old you have to be to get a loan in Canada and learn how you can improve your chances of getting approved.
Frequently asked questions about loans for 18-year-olds
You need to be the age of majority in your province or territory to get a loan in Canada. This is 18 years old in Alberta, Manitoba, Ontario, Prince Edward Island, Quebec and Saskatchewan. It is 19 years old in British Columbia, New Brunswick, Newfoundland, Northwest Territories, Nova Scotia, Nunavut and Yukon.
Lenders will have different application processes. Generally, you'll need to provide a form of identification such as a driver's licence, some personal and contact details, information about where you work and your income.
You can apply as quickly as you want but doing so can have a negative impact on your credit score. If you were rejected, you may want to find out why by asking the lender you applied with before submitting more applications. You might also want to consider applying for preapproval with multiple lenders, which won't result in a hard credit check on your credit report.
To be eligible for a loan, you'll need to be at least the age of majority in your province or territory (18 or 19 years old). If you're younger, you can't get a loan. Your only option would be to get someone older than you to take out a loan for you in their name. But that person would be legally responsible for repaying the loan.
You should avoid getting into debt at a young age. If you can't make repayments, your credit score will be hurt, making it harder for you to get financing in the future.
You can, but you'll have to apply with a cosigner. This means the cosigner will be responsible for the loan if you default on your payments. Read more about your student loan options by checking out our guide to student loans.
Claire Horwood is a writer at Finder, specializing in credit cards, loans and other financial products. She has a Bachelor of Arts in Gender Studies from the University of Victoria, and an Associate’s Degree in Science from Camosun College. Much of Claire’s coursework has focused on writing and statistics, with a healthy dose of social and cultural analysis mixed in for good measure. In her spare time, Claire enjoys rock climbing, travelling and drinking inordinate amounts of coffee.
Learn about your options for personal loans in Ontario and how to choose the right one for your needs.
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