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Young clients in the financial market do not have an easy start. Getting a loan at a young age is difficult, and even lenders are wary of 18-year-olds. When looking for a loan for 18 years, we can count on a slightly smaller but equally interesting number of offers.

Here are 5 most popular options for 18-year-olds to get funding:

  • Bank or credit union

Getting a loan from a bank can be quite problematic, as banks pay special attention to your credit history. Therefore, you can only get financing if you have an account in this bank and a regular income.

  •  Personal loans online

Online Personal Loans are a great option as they are issued in small amounts up to $35,000 by non-bank organizations and therefore credit check is not as strict or not carried out at all.

  • Credit-builder loans

This type of loans on the financial market is designed specifically to build a credit history for people who do not have it yet. Such a loan can be obtained even in the amount of $ 100, repay them on time and improve your credit score.

  • Secured car title loans

The most popular type of secured loans among young people are online title loans, since few people at the age of 18 can afford a mortgage loan. You give the lender ownership of the car as a guarantee that you plan to pay off the loan. A huge advantage of such a loan is the ability to use a vehicle.

  • Guarantor loan

Loans with a guarantor are one of the forms of repayment security for financing institutions. Thanks to them, you have a chance to receive a positive credit decision even when you are accompanied by financial problems.

The main difference between a loan with a guarantor and a traditional payday loan is the fact that you do not assume this type of obligation directly. What does it mean? If you want to get a loan with a guarantor, you need to find a person who will be the surety of the liability, and thus become jointly responsible for paying off the debt.

Therefore, loans with a guarantor make it possible to grant financing even to people with a negative credit history. If your surety meets all the conditions, you can get a loan either as unemployed or with a bailiff.

What loans are available for 18-year-old teenagers?

Young people may have problems with getting a bank loan. Although most banks specify 18 as the minimum age criterion, it does not guarantee to receive funding without demonstrating a fixed income, min. 6 months - it can be difficult for people who are still learning and do not have the opportunity to work. The only solution for young people is a preferential loan for a student, which pays off after completing education and starting work.

The situation is different in the case of non-bank loans: online payday loans and installment loans for 18 years. The requirements are very easy to meet, which makes it possible to take additional money for people who have at least minimal receipts on the account, e.g. academic scholarship, alimony or occasional work without a contract.

What do I need to take out a loan when I am 18 and have no credit?

The requirements for 18-year-olds are exactly the same as for the rest of the borrowers. This means that in most cases we will not take out a loan without:

  • ID card,
  • bank account,
  • mobile phone,
  • e-mail address.

The only document required to apply is a valid ID card, so all online loans from 18 years are loans for an ID card. Of course, all the listed elements must be registered on the same person - the applicant. It is necessary to pass the creditworthiness assessment, i.e. to check the possibility of repaying the loan taken. This means that we must have some source of income. It must be permanent, regular and verifiable.

Accepted forms of employment

Non-bank companies providing loans for 18-year-olds know very well that young people very often do not have permanent employment. Therefore, in many cases, it is possible to receive additional cash even after proving the minimum wage from occasional work and sometimes even from a source that cannot be confirmed by an official document.

Important! Each client is subject to individual analysis. Many small factors are important, including funds in your account, history of payment of liabilities, amount of remuneration, and much more. However, it is a person with permanent employment that has the best chance of getting a non-bank consumer loan.

A loan from the age of 18 can be obtained by showing, for example:

  • regular pocket money from parents received on the account,
  • alimony received from a parent,
  • social benefit - disability pension, disability allowance,
  • remuneration for holiday/weekend / casual work,
  • scholarship.

Creditworthiness and the form of employment

One of the key criteria in assessing ability is the form of employment. You can easily calculate it using the creditworthiness calculator available on different websites. The tool will easily illustrate what factors are important for loan companies when assessing financial credibility. Customers who receive remuneration from:

  • job contract,
  • specific work and commission contracts,
  • pensions,
  • B2B contracts,
  • as well as income from social and maintenance benefits, insofar as they are of a permanent nature.

The more certain the source of income, the higher the customer's credibility will be in relation to the same income coming from a less reliable or permanent source.

What credit score do I have at 18?

In general, your credit score can range from 300 to 850. Usually, when a person turns 18, their credit score is around 500-600, which is considered quite low for an adult. However, when looking at your credit history, the lender may see that your credit score is so low not because of late payments or debts, but because of a lack of credit history in general.

How to get a loan with low credit rates at 18?

In general, your interest rates are most affected by your credit history and credit score. If there is no credit history, there are several alternative ways to get a loan with low interest rates:

  • Recheck your credit history. Even if it seems to you that nothing could affect your credit history, it is better to double-check this several times. Late bill repayments, student loans, and more could lower your credit score without you even knowing it.
  • Think about a payday loan. A small loan from a non-bank organization is a great option for people who have just turned 18. Lenders do not check credit history so carefully and provide the opportunity for a first free loan, which is a very good offer.
  • Consider a loan with a guarantor or collateral. An additional guarantee for the lender in this case will only significantly increase your chances of getting your first loan. Such loans do not require much effort but are issued at significantly lower rates.
  • Provide the lender with a steady income. If you receive a regular income in the amount that allows you to repay the loan on time without any problems, then this reduces the risk for the lender and allows you to get a loan with a low APR. If you are looking for a job, then it is better to give preference to a vacancy with a stable income.
  • Compare offers. All lenders differ significantly in conditions, offers, and interest rates. Spend a little more time looking for the most suitable one and you won't regret it.