If you have just turned 18 years old, you would be excited for various things that you can avail now, ranging from alcohol, voting, to loans. However, when it comes to personal loans for 18 year olds, it is not so easy to apply for them as it sounds. Although, you can easily apply and get approved for the loan, but finding credit is quite difficult.
When you turn 18 years old, you might have some savings and no or little credit history. Therefore, it is advisable for you to know your options, if you are 18 years old and if you need a personal loan. Read on to find out everything related to personal loans for people aged 18 years.
Options of personal loans for 18 year olds
If you are 18 years old, you have several personal loan options, which you can use. These are:
- Take a personal loan from the existing bank
One of the major problems for 18 years old, when they go out and apply for a personal loan, is that their credit history is limited or not at all. So, if you also face such a situation, one way to deal with this problem is to apply for a personal loan with your existing bank. Your current bank will have your travel cards, transaction accounts, etc., thus forming a long history, which in turn increases your chances of getting a personal loan.
- Opt for lower amount unsecured loans
If your current bank does not have personal loans for 18 year olds, you can go for lower amount personal loans. The normal minimum amount for such loans is generally about $5,000, but there are also some lenders that offer $3,000 or even $1,000. You must compare all your options and apply for a personal loan as per your needs.
- Take secured car loans
You can take a secured car loan, if you want a loan to purchase a car. Lenders are more likely to offer secured loan, as they are these type of loans are less risky and in case you default, lenders can recover their losses. Additionally, you can get lower rates on secured loans as compared to unsecured loans. You can opt for either used or new car loans.
- Get a guarantor
If you are not qualified to get a bank loan, you can ask your parents, an old close friend, or a relative, to become a guarantor for you. The guarantor has a huge responsibility, as if you default they agree to pay for the loan, which you took. You can search and compare personal loans that accept joint application and guarantors.
How to compare personal loans for 18 year olds
How can you compare your different personal loan options as an 18 year old? Read on to find out.
- Interest rates
Check the interest rates of different personal loans. See if the interest rates are variable or fixed. Additionally, check the competitiveness of a personal loan with other same products.
- The borrowing amount
See the amount which you can borrow. Different lenders offer different maximum and minimum loan amounts. However, the amount that you are offered eventually depends on your affordability to repay. And, this is decided by the lender’s set criteria.
Check out what all features personal loans offer by looking at different available features and reading the reviews of different loans. Ensure that you are familiarized with a loan’s value-adding features, such as extra repayment option, extended warranty period or an offset facility on a car loan, etc.
You have to pay different kinds of fees on your personal loan, such as monthly fees, establishment fees, early repayment fees, etc. Therefore, you must check what all charges your loan requires before you sign on that dotted line.
These are some of the most important things that you must know about personal loans for 18 year olds. Through them, 18 year olds can get a personal loan as per their requirements.