Loans for Young Adults
Loans for Young Adults - What to expect
Most lenders require you to be 18 in order to take out a loan, with some stretching out their minimum age specification to 21 or 23 years old. All the lenders in the table will only accept applicants aged 18 and over.
If you’re looking to borrow credit for the first time, you should expect to pay higher interest rates than those that have a proven credit history.
Do not apply to multiple different loans or credit products in a short space of time as it will have a negative effect on your credit score, making it even harder to get hold of the credit you want. Find out about your credit file with our credit file spot check guide.
Can I get a loan with no credit history?
Before you feel disheartened, it’s not impossible for those with no credit history to get a loan but it can be expensive. As you have no or limited credit history, lenders can’t predict how you’ll handle credit in the future, so they compensate by charging you higher interest rates.
Before applying, check out your credit file with sites such as ClearScore, Noddle or Experian. Here, you’ll be able to spot any errors or see if there is anything pulling down your score, like an unpaid overdraft for example.
Once you’ve checked out your credit file, you can start making changes to improve your credit score, giving you access to better credit with lower interest rates. For example, registering on the electoral register can really boost your score. Check out our ‘How to improve your credit score’ guide to find out what else you can do to improve your score.
Consider your reasons for needing a loan. If you can hold off from borrowing until your credit score has improved, this could be a better option than paying for an expensive interest rate.
Loans for young people with no credit history - the alternatives
Depending on how much you need to borrow and when you need the money, there are other options available to you:
Credit Builder Credit Cards: Designed for those with limited or no credit history, these credit cards can help you build up your credit score and can even offer limits of up to £1000.Authorised overdraft\: Compare bank accounts with Choose Wisely and find a bank that offers a low or free-fee overdraft facility. Great option for small emergencies but don’t use it for big spends as it can get severely pricey. Find out more here.
Borrow from Family or Friends: No one likes to ask but often, borrowing from your family and friends is the cheapest and safest option. Ask around and see if anyone can help.
Claim benefits and grants: There’s a huge variety of benefits out there and you can find out how and where to claim in our guide: ‘How to: Claim the benefits you’re entitled to.’ If you’re at university, make sure you’re claiming all the grants and loans that are available to you.
Where to get debt help
When you’re ready to find help, there are loads of free debt counselling services available. These services will give you a route to get back on track. Check them out:
- Money Advice Service - 0800 138 7777
- Stepchange - 0800 138 1111
- Debt Advice Foundation - 0800 043 40 50
- National Debtline - 0808 808 4000
- Payplan - 0800 280 2816
- Christians against poverty - 0800 328 0006
- Debt support trust - 0800 085 0226
- Business Debtline - 0800 197 6026
- Citizens Advice Adviceline - 0300 330 1313
Final Word
It’s good to know you’ve got options but getting a loan isn’t a light decision, especially if you’re paying interest rates on the higher end of the spectrum. Compare all your options and have a look at your current spending to find out if you can make any cutbacks before you go down this route.