Yes, you can get a loan at eighteen years old, since you are legally considered an adult. But it’s a little harder than that if you don’t have an existing credit history or a record of employment. As a young adult, you may need to find a cosigner, since they can add their credit history to yours.

If you’re not able to find a cosigner, though, don’t fret! You can likely still get a secured loan that requires collateral, such as a vehicle or savings account. Young borrowers can also work with a credit union for unsecured loans, but they may need to prove their creditworthiness by providing proof of income, bank statements, or other financial documents. In this post, we’ll talk about how to improve your chance of loan approval and, more importantly, how to find the financial support you need to thrive in early adulthood.

Common Loan Factors

Your Credit History

At eighteen, if you have a minimal credit history (usually called a ‘thin file’) you’re probably going to be offered higher interest rates due to higher perceived risk. That doesn’t mean that you can’t get a personal loan, of course, it just means you need to be aware of your loan amount and your ability to pay it back.

Lenders typically want to see a good credit mix, on-time payment history, amounts owed, and other factors when considering your credit history. But you can build your credit profile over time by being added as an authorized user on your parent’s credit card, acquiring a student credit card, or taking out a credit builder loan.

Your Credit Score

If you already have credit history, it’ll be a lot easier to get a personal loan, since credit bureaus are ‘vouching’ for you. But it can still be difficult for young adults, because having a limited history means their credit score may not be great.

To build your credit score and ensure the lowest possible interest rates, you can look into credit builder loans, or utilize a financial service to add your on-time phone, utility, insurance, and rent bills to your credit score.

Common Loan Types

Student Loans

Getting approved for a student loan is one of the most common loan types for individuals going to college. Student loans typically have lower interest rates and are, therefore, more accessible to eighteen-year-old borrowers. Intandem Credit Union, in partnership with Sallie Mae®, is here to help college-bound students with loans that offer competitive variable and fixed interest rates.

Personal Loans

Whether you’re interested in starting out with a credit builder loan, need to secure a car loan, or you’ve experienced an unexpected emergency, Intandem is here to assist. We work closely with our members to help them save money, build credit, and finance major purchases. As the go-to credit union in Grand Rapids, we’ve built our reputation on top-notch service, financial guidance, and access to personal loans.

If you need to secure your first loan, contact our team today to discuss how we can help.