Loans for Young People
Friday, Sep 15, 2017 10:18 AM

Being young is lots of fun. It can also cost lots of money. Whether furnishing your first apartment, a little extra cash to spend tonight until you get your first paycheck, or taking courses to advance your career, you'll need steady access to cash.

Challenges to Access and Solutions

Getting a personal loan is a challenge because you may have little history paying off bills. If that is the case, you might see higher interest rates attached to the money you borrow. Not to worry, there are ways to manage it. You can have a parent, sibling, or close friend cosign a loan. At Backed, Inc., you can take out a loan for the cash you need, and have someone with a high credit score cosign the loan. You get the money you need at a nice rate, and once you pay it off, your credit score rises.

Another option is to diversify debt. That means take out credit cards with low balances. If you choose the right one, you can get a 0% introductory offer, and by the time the offer period expires, you paid the balance. From there you can gain access to new funds with some meat to your credit history. At Compare First, you get a selection of the personal loans and credit cards you pre-qualify for so you can pick the one that’s best for you.

Smaller loans to start. These loans can be from $100 to cover next month's rent to $2,500 to pay for a course in Java programming. Taking out a small personal loan can establish a reliable credit history. A personal loan has advantages over a credit card in terms of lower interest rate, fixed monthly payment, and a definite timetable for paying the loan back. Taking out loans for small amounts is a great way to accumulate little victories towards raising your credit score.

Tips for Managing Debt

What happens when you follow these steps, and the cash starts rolling in. There is a temptation to use it quickly. Many times, we wake up one morning and realize that it's time to scale back a little. If that does happen, you have lots of strategies to keep your finances in the safety zone.

Interest is tax deductible, so pay loans with the highest interest first. Pay down the expenses most likely to cause problems, usually a credit card with the largest rate. You can deduct the interest part of this expense from your taxable income. Enjoy a double bonus as your tax refund gets larger or your tax burden becomes smaller. With the extra money, you can pay down more debt.

Your credit score is your financial lifeline

One day you might want to start a business, or take out a mortgage for a new home. You may even want to access funds to buy a car. If you forget a credit card payment today, even if it's just a $20 minimum, it will go on your credit report and lower your score. That may not mean much now, but when you take out larger loans in the future, a lower credit score means the loan will demand higher installments.

Register to vote. When you get settled into your first place, be sure to register to vote. This goes on your credit report and communicates that your situation has stabilized, increasing the chances of getting a loan.

Know your options. Whether no credit history, or a poor credit history, you can get a personal loan. The key is to know who will lend you money. At Compare First, we make sure you are the one who wins by finding all the types of loans you are pre-qualified for, and giving you the chance to pick the one that’s best for you.