Finding lenders that consider loan applications from younger individuals isn’t that hard. Most lenders are known for giving out loans to people aged 18 and over.

That being said, you may run into higher interest rates and find that not having a substantial credit history may work against you when looking for a loan.

In this post, I’ll be discussing what steps you should be taking in order to secure a loan for yourself as a young adult and what are some things you should be looking out for. 

Is it Possible to Get a Loan with Little to No Credit History? 

As a young adult, you will most likely have little or no credit history when approaching a lender to acquire a loan. 

Please note that there is a very big difference between having no credit score and having a poor credit score. Although, both of them can result in you having difficulty securing a loan. 

As you can probably imagine, getting approved for a loan with no credit score can be very difficult. This is because your credit history is something that lenders look at in order to determine how financially disciplined you are. If no such record exists, they have no way to assess if you’re responsible with managing your debts or not.

Having a non-existent credit score is also known as a ‘thin file’. It does not mean that no lender will give you a loan but it does mean that your options are limited. 

However, you don’t need to panic. It’s not entirely impossible to get approved for a loan if you have no credit history but it can get expensive as you’ll be dealing with a much higher interest rate. 

As a person with no credit score, you may also have access to only relatively smaller loans. 

Since lenders can’t determine how you’re going to handle your loan repayments (since you don’t have a credit record), they will reduce their risk by charging you a higher interest rate. 

It’s easy to get conned or manipulated by a lender since you don’t know all the ins-and-outs of how loans work. This is why I urge you to only deal with lenders who are authorised and regulated by the Financial Conduct Authority

They have guidelines in place to protect debtors from any type of malpractice or mistreatment. If you’re having trouble finding lenders, you can contact an independent charity such as National Debtline. They could turn you onto affordable lenders.

loans for young adults

Is there a Way to Build My Credit Rating as a Young Adult? 

There are several simple ways through which you can improve your credit score as a young person

One of them includes making sure that your name is on the electoral roll. If you’re not on this, then you should immediately get registered with your local authority at your current address. 

You can also opt for something known as ‘credit builder’ credit cards. As the name suggests, these types of credit cards are literally designed for individuals who are looking to improve their credit rating. 

Credit builder credit cards often have low spending limits but this can actually be an advantage since it will stop you from spending too much and accruing large amounts of debt.

When you’re looking to build up a respectable credit rating, it’s a good idea to use your credit card only for essential expenditures. Use it for groceries, fuel and utilities which you needed anyway and then at the end of the month, pay off the outstanding balance in full. 

A great rule of thumb for this is that if you wouldn’t pay cash for it, you shouldn’t be using your card to pay for it either. 

As long as you keep clearing the outstanding balance each month, your credit rating is going to start improving. 

It’s also very important that you don’t apply to too many lenders at once. This is because each application you make will be mentioned in your credit file. If you apply to too many lenders and get rejected by a handful of them, this will reflect badly upon you and will result in a lowering of your score.

The most important thing to keep in mind is that your score is not the only thing that lenders take into account when judging your application. 

Your income as well as your expenditures are also assessed. As long as you are able to prove that you will be able to afford your loan repayments, you stand to have a very good chance of getting your loan application approved. 

What are some tips for when Acquiring Loans for Young People? 

If you’re a young adult transitioning into the workforce from education, money management can definitely seem quite overwhelming.

Personal loans are definitely a great way of acquiring assets and funding certain purchases but it’s important for you to thoroughly assess why you’re getting a loan and whether it will ultimately benefit you or not.

Firstly, the most obvious thing you need to think about when you’re looking for a loan is whether or not you’ll be able to pay it back or not. 

This is something that you will need to thoroughly assess and it should be at the forefront of your thought process when you’re determining whether you should go for a loan or not.

If you can’t comfortably make payments towards your loan, don’t go for it.

Additionally, always take into account variable interest rates when you’re determining whether or not you can afford a loan or not.

There will be dire consequences if you are unable to make payments towards your debt due to a rising interest rate. 

Secondly, when it comes to personal loans as well as credit card loans, it’s a good idea to pay off more than the minimum payment required each month. 

This is because the quicker you pay off your debt, the less you’ll be paying in interest overall.

Hence, it’s a very good idea to get repayments on your loans done and over with as soon as possible. Loans for young people and loans for students usually have an especially high-interest rate which is why it’s definitely a good idea to be done with the payments as quickly as you can. 

Thirdly, I would suggest you to thoroughly go over all hidden costs that a lender may have. Young people can be hasty with their decisions.

While it’s definitely exciting to get money in order to fund whatever purchase you’re going for, it’s important to read the fine print to ensure you’re paying what you think you’re paying. 

You don’t want to be ambushed by any hidden costs or fees that may throw a wrench in your budget or finances. 


Loans for young people may seem difficult to obtain but in reality, there are many lenders that specialise in these types of loans. 

You’ll have to accept the fact that probably will not get a competitive interest rate and this is something you should be prepared for. 

I hope you found this information useful. Contact me if you have any further questions.

About the author

Scott Nelson

Scott Nelson is a financial services expert, with over 10 years’ experience in the industry, including 6 years in FCA regulated companies. Read more
×Find your best debt solution SEE IF YOU’RE ELIGIBLE