When you are new to the United States, chances are high that you haven’t approached a financial institution yet for a loan. Your bank account in the US itself might be recent, which means that you are yet to develop a credit history in this country. Unfortunately, your credit report is something that most banks would consult before approving a loan application. This guide will tell you all about the best personal loans for newcomers in USA.
Getting a loan with no credit history can be the hardest thing on this planet since the lender doesn’t know whether you are a good borrower or a risky one. In this case, lenders do not have any way to find out if you’ll be able to pay back the loan on time or if at all.
At least, the good news is that having no credit history is certainly better than having a bad one. Still, I would advise you to first look for tools that can help you build your credit score in America.
If you’re new to the US, you may find it difficult to get approved for a personal loan. Lenders often require borrowers to have a credit history in the US in order to qualify for a loan.
However, there are a few lenders that offer personal loans to newcomers.
In this article…
Personal Loans for Newcomers in USA
Here are a few of the best options:
To qualify for a loan with SoFi, you must have a job or income source in the US. You’ll also need a Social Security number and a US bank account.
Credible is another good option for newcomers. They offer personal loans with no origination fees and no prepayment penalties. Interest rates start at 4.99%.
To qualify for a loan with Credible, you must have a job or income source in the US. You’ll also need a Social Security number and a US bank account.
Marcus by Goldman Sachs
Marcus by Goldman Sachs is a good option for newcomers because they offer personal loans with no origination fees and no prepayment penalties. Interest rates start at 5.99%.
To qualify for a loan with Marcus by Goldman Sachs, you must have a job or income source in the US. You’ll also need a valid driver’s license and a bank account in the US.
Credit Builder Loan
Taking a credit builder loan is the most powerful strategy for newcomers with no credit history.
In a credit builder loan, you borrow a small amount of money from the lender. The catch is that you don’t actually receive the money. Instead, the amount is transferred to a savings account, on your behalf. Now, every month, you’ll have to make timely payments towards the loan, which will be reported to the credit bureaus by the lender.
Eventually, your credit score will rise. Once you have paid back the entire amount, you will receive the loan amount.
A good option for a credit builder loan is: Self Lender
A credit score is nothing more than a report of how you manage debt, regardless of whether it is in the form of a loan or credit card bill payments. Credit cards are actually the quickest and possibly the most effective way to build a good credit history. I believe that this could also take care of any small monetary requirements you might have.
However, you’ll have to use the credit card responsibly and pay all bills on time. If you pay in full, you won’t even need to pay any interest. The issuer of the credit card will report your payments to the credit bureaus, which, in turn, will use such reports to establish your credit score.
Here are some good options for credit cards that don’t require you to have a minimum credit history:
- First Progress Platinum Elite MasterCard® Secured Credit Card
- Green Dot Primor® Visa® Gold Secured Credit Card
- UNITY® Visa Secured Credit Card
Another great option to get yourself a small amount of money without any credit score is to contact the Federal Credit Union and ask for a payday alternative loan. Here, you can borrow money up to $1,000 for a tenure of 1-6 months.
To find similar products, you can also look at state and private credit unions. However, double check with your credit union whether they will report your on-time payments to all three credit bureaus, else paying back the loan on time will not be of no use to your credit score.
An exception to this is Stilt.
Stilt is a provider of loans to immigrants, non-US citizens, international students, and F-1, OPT, H-1B, TN, O-1, and L-1 visa holders. It is the best option for newcomers to the US, with no credit history. Such a loan can help you get a kickstart to building a credit history since they take into account various other factors to determine your creditworthiness.
Get a secured credit card
A secured credit card is a good option for first-timers with no credit history because it requires a security deposit, which acts as your credit limit. This deposit is usually equal to your credit limit, so it’s a good way to build credit without having to worry about overspending.
Use a co-signer
If you have a friend or family member with good credit, you can ask them to co-sign for a personal loan. This will help you get approved for the loan and build your credit history.
Get a credit-builder loan
A credit-builder loan is a type of loan designed to help people build their credit. With this type of loan, you borrow a small amount of money and make regular payments over a set period of time. The payments are reported to the credit bureaus, which can help you build your credit history.
If you are a newcomer to USA and have no credit history, you may still be able to qualify for a personal loan from some lenders. To improve your chances of qualifying and getting a lower interest rate, you can take the following actions:
- Build up your savings so you can make a larger down payment.
- Get a co-signer with good credit to help you qualify and get a lower interest rate.
- Look for lenders that specialize in loans for people with no credit history.
All the best!
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