How to Get Starter Loans Online

December 5, 2020 By: Cox Search

Getting started financially on your own as an adult can seem daunting, but it’s much simpler with easy-to-understand starter loans. Nearby, you can connect with a local expert to answer your questions about getting started with a starter loan, but here are some of the most common questions and answers on the subject:

What is a starter loan?

Starter loans, or credit-starter loans, are personal loans targeted to people who either have poor or no credit with the intent of helping them quickly build credit and improve their scores. These loans are slightly different than a credit-builder loan, in which you don’t have access to the money until you’ve paid for it. With starter loans, you’ll have access to your money as you normally would for an ordinary personal loan.

With credit-starter loans for bad credit, the idea is to build up a record of regular, on-time payments. The loan amounts are typically small and low-risk for the lender, and it basically creates a win-win scenario for both the lender and the person hoping to build up their credit.

Can I get a starter loan with no or bad credit?

Yes, as that’s essentially the function of most starter loans. No credit check is necessary for many of them, as they’re for small amounts.

Who should get credit-starter loans?

Here are some examples of the type of people who would most benefit from this type of loan:

• People who don’t have a credit history, such as 18- to 22-year-olds right out of high school or college
• People who need to re-establish credit after a bad financial incident
• People with a stable income who can make the payments
• People hoping to boost credit scores before obtaining a mortgage or a new vehicle

How does a starter loan work?

Basically, you want to show proof to the three major credit bureaus that you can consistently make regular, uninterrupted payments on significant debts, and, by design, you can build that proof relatively quickly with credit-starter loans. Online or in person, you’ll be able to apply for a small loan that gets that job done. But there are a few things that differentiate a starter loan from a personal loan:

• They’re typically for smaller loan amounts. A good starter might be $1,000 or $1,500.
• They won’t require solid credit. These loans are meant for people who haven’t established their credit yet or are trying to improve it.
• They have lower, regular interest rates. Compared with other loans for people with no credit, these rates aren’t designed to be unreasonable.
• They may be secured or unsecured. Collateral is usually not a factor for loans at Bell Finance, for instance.
• The lender should report payments to the credit bureaus. If the lender doesn’t report to the bureaus, it won’t accomplish your goals.
• The terms depend on the lender but are often relatively short. They’re short (often less than a year) usually because they’re in smaller amounts.

When you’re shopping around, asking, “Are there any credit starter loans near me?” you’ll want to look at two factors, primarily: 1. The APR, or interest and 2. the required collateral, if there is any. You won’t want to spend too much money or risk too much as you’re building easy credit.

What are some alternatives to starter loans?

There are dozens and dozens of ways to build credit. A starter loan is a great way, but you can also use any of these other tactics for building credit:

• Secured Credit Cards: Credit cards are risky, but necessary for building credit with the bureaus.
• Credit-Builder Loans: Like starter loans, these loans are another way to show off credit history.
• Joint Accounts/Authorized User Status: Become an authorized user on your parents’ or family’s credit card.

Remember to check your reports. Check and ensure nothing is amiss on your credit reports from the three bureaus once per year. Fraud is often the source of many credit score woes.

Consistently paying off debts on time is simply the best way to increase your score over time, and there are many different strategies to use. A starter loan is a great way to get off on the right foot.

Can you get a starter loan online?

Often, you can, depending on the lender! If you’ve been wondering, “Are there starter loans near me in Oklahoma?” then you can apply for one of our personal loans easily online with our online form or call us to get started. You can get approved in as little as 30 minutes!