Getting bank loans for people with no credit can be frustrating. Sometimes having no credit is worse than having bad credit when trying to get a bank loan. It's almost like lenders would rather deal with the devil they know and one they don't. This means that someone who has bad credit has one thing a person with no credit has, payment history. Bankers like to see a track record for how person repays their lending products when considering them for a loan. Trying to get a bank loan with no credit is not uncommon but it's important to use a good strategy to get approval. And if you're trying to use a bank loan in order to establish credit there are additional choices to help you with that.
The most important thing is that somebody with no credit that intends to want to easily borrow money in the future, establish some kind of credit history. Working is a good first step and will be necessary to qualify. Besides credit the employment history and validity of income is arguably the second most important thing in getting a loan. You're even in a better position if you've been working for two or more years at the same company and have had the same income or it's been gradually increasing. Having income is important because it shows a lender that you have the ability to pay back the loan.
Another important key is looking at your expenses in comparison to your income. Banks compare how much money you make to how much you spend each month. They usually look at how much you pay for rent and how much you pay other fixed bills. If your total monthly expenses are less than 40% of your gross income (which is your income before deductions and taxes are taken off) your in a good position. If your monthly expenses are 80% of your gross monthly income is going to be difficult. You have to do your homework as every bank will have different criteria for evaluating this expense to income ratio.
Using a cosigner is deftly an important option for people with no credit trying to qualify for a bank loan. This can be either a family member or trusted friend that has established good credit and other qualifications. When a cosigner backs a loan for someone else the bank essentially qualifies the cosigner on their own. What the bank is looking for is if the loan doesn't get paid what's the ability of the cosigner to repay the loan.
Wells Fargo has a product specifically designed for someone with no credit to potentially qualify for a loan to build their credit. This collateral no credit loan, has one unique feature where the collateral is an investment that is returned to the borrower once the loan is paid. The investment is a CD and is matched to the length of the loan. The loans are a minimal of 12 months and are $3000. The borrower opens a CD for $3160 and Wells Fargo supplies the loan. The great part is when the lowest paid off you get $3160 back with interest.
Whether one is attempting to purchase something or just establish credit it have the ability to qualify for more than no credit bank loans, it's good to know you do have options. In either case it's important for you to establish credit if you plan on boring money in the future. To be honest it's very difficult to operate in the United States and many other countries without a valid credit card. It's not that you have to use a credit card to charge things it is that it's usually required as a sort of deposit. It can also save you money having a credit history beyond borrowing as many companies that supply service by cable TV or a telephone, will require a cash deposit if you have no credit. Using bank loans for people with no credit as a vehicle to establish your good payment history is a viable option to consider and makes sense in most situations.
*It may help to consult a professional that's unbiased to advise what options would be best for you.