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Compare loans for 18-year-olds

How to get a loan as a teenage borrower.

It’s possible to get a personal loan if you’re 18 years old and have no credit history — everyone’s gotta start somewhere! Yes, your options are more limited compared to older borrowers, but there are lenders with more lenient credit score requirements and loans geared specifically for new borrowers.

Just make sure you are the age of majority in your state — some states require you to be over 18 to take on a loan.

Name Product Filter Values APR Min. credit score Loan amount
Upstart personal loans
Finder Score: 4.2 / 5: ★★★★★
Upstart personal loans
7.80% to 35.99%
300
$1,000 to $50,000
This service looks beyond your credit score to get you a competitive-rate personal loan.
SoFi personal loans
Finder Score: 4.4 / 5: ★★★★★
SoFi personal loans
8.99% to 29.99%
680
$5,000 to $100,000
A highly-rated lender with competitive rates, high loan amounts and no required fees.
Best Egg personal loans
Finder Score: 3.8 / 5: ★★★★★
Best Egg personal loans
8.99% to 35.99%
640
$2,000 to $50,000
Fast and easy personal loan application process. See options first without affecting your credit score.
Upgrade
Finder Score: 4 / 5: ★★★★★
Upgrade
8.49% to 35.99%
620
$1,000 to $50,000
Check your rates with this online lender without impacting your credit score.
LendingPoint personal loans
Finder Score: 3.3 / 5: ★★★★★
LendingPoint personal loans
7.99% to 35.99%
620
$2,000 to $36,500
Get a personal loan with reasonable rates even if you have a fair credit score in the 600s.
Happy Money
Finder Score: 3.8 / 5: ★★★★★
Happy Money
11.72% to 24.50%
640
$5,000 to $40,000
Pay down your debt with a fixed APR and predictable monthly payments.
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8 loans for 18-year-old and no-credit borrowers

As a teen borrower, you likely have no credit history. However, lenders expect this. Older, experienced borrowers might have a leg up regarding creditworthiness, but there are still plenty of lending options out there.

Here are eight lending options to consider as a teenage borrower:

1. Cash advance apps

Traditional lenders like banks or credit unions may turn you away if you have no credit history. But you may be able to get an advance on wages you’ve already earned through a cash advance app — even if you get paid hourly.

Apps like MoneyLion or Brigit offer free cash advances and other financial wellness services to members who pay a monthly subscription fee. Others might suggest a tip of up to $14 per advance, though it’s not required.

Since income is the main determining factor in eligibility, your lack of credit history doesn’t affect your chance of approval. But you may not be able to borrow more than $200 per pay period.

2. A loan from your current bank or credit union

Banks and credit unions can be more willing to offer your first loan if you have a long history with them — especially community banks. You may get around your no-credit situation by applying with them if you have an existing account, positive account balance and regular income.

3. Small-dollar unsecured loan

If your bank doesn’t have a loan you want to apply for, you might have more luck applying for personal loans in lower amounts. You can find personal loans as low as $1,000. But some lenders offer smaller amounts on marketplaces like Credible, which partners with lenders that offer loans as small as $600.

4. Cosigner loan

Unsecured personal loans with cosigners exist, but they’re pretty rare. If you can find a lender that offers unsecured personal loans with cosigners, you may consider asking your parents, another relative or even an older close friend to be a cosigner.

When you apply with a cosigner, the lender considers the highest credit score and income on the application. If you can’t repay the loan, then repayment becomes their responsibility. This adds security to the loan, increasing your approval odds.

A cosigner is not the same as a coborrower — also known as a joint borrower or joint applicant. A coborrower can only help you get approved when you lack income, not credit history. They would have equal responsibilities to the loan as the other borrower, whereas a cosigner only steps in to repay the loan if the primary borrower becomes unable. Think of cosigners like a backup payer that helps you get approved for a loan and a coborrower like an equal partner who repays the loan with you.

5. Car loans

Often, the first secured loan a new borrower gets is an auto loan, and many lenders are willing to work with no-credit borrowers. Most car loans are reported to the credit bureaus, helping you to build a credit history. And since auto loans are secured by the vehicle, getting approved as a new borrower is generally easier than trying for an unsecured personal loan.

It’s also common for teenage borrowers to have a cosigner on their first car loan, usually to increase approval odds or to get a lower interest rate.

Name Product Filter Values Minimum credit score APR Loan term Requirements
LightStream Auto Loans
Good to excellent credit
Competitive
2 to 7 years
Must have a good to excellent credit profile, be a US citizen or a permanent resident with a valid green card, have a valid Social Security number, credit card verification requested upon loan approval and have a valid US address.
Quick car loans from $5,000 to $100,000 with competitive rates for borrowers with strong credit.
CarGurus
CarGurus
Varies
Varies depending on the lender
3 to 6 years
Varies depending on the lender
Go to site
CarsDirect auto loans
No minimum credit score
Varies by network lender
Must provide proof of income, proof of residence, and proof of insurance.
Save time and effort with this lending service specializing in beginner-friendly or subprime car loan.
Carvana
No minimum credit score
3.9% to 27.9%
1 to 6 years
18+ years old, annual income of $4,000+, no active bankruptcies
Get pre-qualified for used car financing and receive competitive, personalized rates.
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6. Credit-builder loans

A credit builder loan can help if your goal is to build a positive credit history when you turn 18 — but they won’t help if you’re short on cash.

Often available through banks and credit unions, credit-builder loans act more like locked savings accounts where you deposit funds into an account that the lender reports to credit bureaus as a loan repayment — which can improve your credit score. Credit score requirements for these loans are less stringent since they’re designed for borrowers with little or no credit.

It works like this: Suppose you were approved for a credit builder loan for $500. The lender opens an account for you, and you make payments until you’ve paid $500. Once you complete the loan, the $500 is released to you.

7. Student loans

Students are one of the only loans an 18-year-old borrower can likely qualify for without a cosigner. You may even be able to take out student loans as a 17-year-old with a cosigner.

Many people consider student loans just to pay tuition, but they can also be used to cover some living expenses. Student loans can have low rates, long repayment terms and flexible repayment plans compared to personal loans.

However, due to the sizable amount of these loans, they can get out of hand quickly if you’re not on top of repayments. Missed or late payments can really harm your credit, and carrying high student debt can affect your chances of getting a car loan or mortgage down the road. Stay in touch with your student loan servicer if you decide to take on student debt.

8. Credit cards

Credit cards are one of the easiest lending products to qualify for as a teenager. In some cases, you just need to be 18 (or the age of majority in your state), be able to afford minimum monthly payments and have valid identification.

Most credit cards are unsecured, but there are also secured credit cards that you back using a cash deposit. These are designed to help you build your credit history, rather than advancing you money.

If you can’t repay the balance on the card, the deposit you made to open the account can be used to cover the balance. There’s very little risk for the lender, so they’re easier to qualify for than unsecured ones.

Using a credit card the way you would a debit card can be a simple way to start building a credit history. But they can also get out of hand if you overspend. Credit cards are known for high rates, so be mindful of your spending — interest charges can rack up fast.

Not all states allow teenagers to borrow

Every state has an age of majority, or the age you’re considered a legal adult. In most states, it’s 18, but there are some expectations.

The age of majority is 19 in Alabama and Nebraska, and 21 in Mississippi, according to Cornell Law School. So even if you’re 18 in those three states, you legally can’t get a loan or enter any other legal contract.

What credit score do I have when I turn 18?

If you’re a teen and you open your first account, plan on having a credit score around the high 500s to low 600s, which is considered poor-to-fair credit. That’s because the length of your credit history plays a major factor in your credit rating.

Credit scores range from 300 to 850, and the higher, the better. The major credit scoring models (VantageScore and FICO) generate your credit score from the information on your credit reports. Before you build a credit history, lenders consider you a no-credit borrower.

And you don’t automatically get a credit score when you turn 18, according to Experian. To have a credit score, you need to build a credit history by paying on reported accounts like a car loan or credit card — or utility bills and rent, in some cases.

So when you first start, don’t expect to have a great credit score right away. It can take a few years to really see improvement — but make sure you stay on top of all your bills and loans because payment history is the most important factor in determining your credit score.

What do I need to apply for a personal loan?

Lenders have different application processes. But generally, you’ll need the following documents to apply for a personal loan:

  • Valid ID, such as a driver’s license
  • Bank account with a positive balance
  • Recent pay stubs, tax returns or bank statements
  • Proof of address, such as a utility bill in your name
  • Employment verification or employment address
  • Phone number and other contact information

How to get low rates as a teen borrower

Your credit score is one of the most important factors in determining what rates you can get on a personal loan. If you don’t have a credit history at all, lenders can be wary because you haven’t proven your ability to repay the money on time — your creditworthiness is a wild card.

However, there are quite a few things you can do to increase your chances of getting a competitive interest rate:

  • Review your credit. You may have a credit history you don’t know about. Student loans, missed electricity bill payments and past-due rent payments can show up on your credit reports. Check your credit reports and score to make sure there isn’t anything harming your credit.
  • Be employed. As an 18-year-old borrower with no credit history, your income is paramount to your loan application. Having a consistent work history without long gaps between jobs can tell the lender you’re financially stable. If your income is lacking or you’re newly employed, consider waiting a few months to build a work history or getting a joint personal loan with someone else.
  • Apply for a short term. Short-term loans tend to get lower interest rates. Shorter terms present less risk to lenders, so they might offer a lower interest rate. But because you have less time to repay the funds, your monthly payments may be high.
  • Compare lenders. There are so many different kinds of lenders, and it’s worth your time to compare their rates, terms and conditions. All borrowers — regardless of credit situation — should weigh options before deciding on a lender.
  • Consider a cosigner. Cosigners not only increase your chances of approval, but they can also help you get a lower interest rate than if you were to apply alone. A cosigner with a great credit score (in the 700s or higher) could help you qualify for a competitive rate as a teenage borrower. But very few lenders offer joint personal loans.

Bottom line

You may find it tough to qualify for an unsecured personal loan as an 18-year-old with no credit history. However, it’s not impossible. Luck favors the prepared.

Be sure to compare lenders, review your credit reports, and shop within your limits. For more lending options, check out the best personal loans.

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18 Responses

    Default Gravatar
    MeghaNovember 21, 2018

    I am 19 years old. I am working and I am getting $12,000 per month. I want loan how to apply?

      AvatarFinder
      JhezelynNovember 22, 2018Finder

      Hi Megha,

      Thank you for your comment.

      Please note that most of the lenders would require 18 years old and above applicant with a stable source of income. Not only that, but there are also other factors that a lender will assess before considering you for a loan. As long as you meet the eligibility criteria and the requirements, then you may be approved for a loan.

      Learn more about cash loans offers. Please click the Go to Site button to apply. Please make sure that you’ve read the relevant T&Cs or PDS of the loan products before making a decision and consider whether the product is right for you.

      Should you wish to have real-time answers to your questions, try our chat box on the lower right corner of our page.

      Regards,
      Jhezelyn

    Default Gravatar
    KyOctober 1, 2018

    I am 18 and I have been working a full-time job for 8 months. I make $470-$600 a week depending on overtime. I have had a credit card for just over a month now and have it paid off. I am looking to get a loan for a snowmobile. I have 22% to put down on the loan but since I show very little credit, I feel like it’s impossible to even get a loan. It is so hard for prospering 18 year olds to do anything these days because of the reputation not so prosperous 18 year olds have left. I feel as if I’m being punished for working a full time job and getting approved for a credit.card. I am curious if there is anyway for me to get approved for a loan without a cosigner?

      AvatarFinder
      JeniOctober 4, 2018Finder

      Hi Ky,

      Thank you for getting in touch with finder.

      Yes, you still have the chance of getting approved even without a cosigner however the loan amount may not be as much as loan application with a cosigner. Since you have worked full-time for 8 months, it is best that you inquire with the bank where you’re receiving your salary from if you can apply for a loan without a cosigner on a certain amount that you need to buy a snowmobile. Please note that banks/lenders don’t only look at the credit history of the applicant but also the capability to repay the loan.

      I hope this helps.

      Please feel free to reach out to us if you have any other enquiries.

      Thank you and have a wonderful day!

      Cheers,
      Jeni

    Default Gravatar
    CarltonSeptember 25, 2018

    I’m 18 years old and I’m trying to get a 2011 BMW 535i that cost $11.350 and I’m in sun cost. My problem is that I don’t have a working history so is my interest rate going to be really high or waht

      AvatarFinder
      JoshuaSeptember 26, 2018Finder

      Hi Carlton,

      Thanks for getting in touch with finder. I hope all is well with you. :)

      While it is possible for you to obtain a car loan even if you’re 18 years old, it would be difficult to get approved. Generally, car loan lenders qualify borrowers using their credit history and score. Since your 18 years old and still starting to build your credit, you may have trouble meeting their requirements. For this reason, you might not get approved or you may get approved but the interest rate may be higher than average.

      As a tip, you need to show the lender that you have savings in the bank. You also need to show that you have a stable income and have the ability to make the repayments. Be ready with your down payment as well. Finally, if all else fail, you may consider getting a cosigner.

      I hope this helps. Should you have further questions, please don’t hesitate to reach us out again.

      Have a wonderful day!

      Cheers,
      Joshua

    Default Gravatar
    NeilcafferySeptember 11, 2018

    I’m an 18 year old with $50000 I have a job making $1300 a month after taxes. I’m looking to buy a small business that already has established cash flow I will quit my job to run the company I need a $200000 loan to buy the business can I get approved?
    Thanks

      AvatarFinder
      CharisseSeptember 12, 2018Finder

      Hi Neilcaffery,

      Thanks for reaching out to Finder.

      You have accessed the right page where you can review and compare lenders that accept loan applicants your age. The possibility of you getting approved for a loan with these lenders greatly depends on you being able to satisfy and meet these lenders’ eligibility criteria and requirements.

      Most lenders featured on this page have a specific credit score requirement that you should meet so you can qualify for a loan application. They will also look at your financial statuses like your employment details and other sources of income. As long as you meet all these qualifications and eligibility requirements, you have a high chance of getting approved for a loan.

      If you haven’t checked your credit score yet, you can see a list of credit bureaus where you can get your credit score and report.

      I hope this helps.

      Cheers,
      Charisse

    Default Gravatar
    PavarOctober 18, 2017

    Hi Sir, my name is Pavar. My loan requirements is $ 50,000. I want loan for my some personal needs. I’m a salaried person. My salary is $ 13,000 per month and comes as cash. Am I eligible for a personal loan?

      Default Gravatar
      JonathanOctober 19, 2017

      Hi Pavar,

      Thank you for your inquiry.

      You can check our list of personal loan offers. You can customize the selection by choosing your credit score range and state of residence.

      It is worth reminding that more than your income, each lender has their own credit guidelines in assessing your loan. You may click “Go to Site” green button to proceed with your application of your chosen provider.

      Hope this helps.

      Cheers,
      Jonathan

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