Thanks to the current economic downturn and credit crisis, getting a loan with no credit history is not an easy thing to do. If a consumer is looking for a loan with no credit history at all, it can mean higher interest rates, higher monthly payments and tough credit terms.
Consumers having trouble making ends meet may seek a loan with no credit history in order to pay their bills. This could mean taking out risky "Payday Loans", which can have exorbitant interest rates and can mean a lot of trouble if they are repaid late.
To get a loan with no credit history, the upfront requirements on the consumer will likely be a great deal more than they would be if someone with a solid credit history were involved. In instances where no down payment may have been involved for someone with a credit history, getting a loan with no credit history may require a down payment from 10 to 25 percent in order for the deal to be approved. The interest rates, which might have been as low as 5 to 10 percent, could be as high as 25 to 30 percent.
Getting a loan with no credit history can still be obtained at less onerous rates if a consumer is willing to do a little legwork. If they are willing to compare rates between lenders and see if they will be willing to compete for business, they may find their rates slightly reduced. Being willing to repay a loan over a shorter period of time with higher payments may also convince a bank or other lending institution to take a chance on a loan to someone with no credit history.