How Old Do You Have To Be To Get a Loan?

Life throws financial curveballs sometimes, and a loan can be a helpful tool to navigate those unexpected bumps. But when it comes to borrowing money, age can be a factor. You might be wondering, “How old do I have to be to get a loan?” 

The answer, like many things in finance, depends on the type of loan you’re looking for. 

In this article, we’ll break down the age requirements for common loans, with a special focus on title loans, which can be a quick option in a pinch.

How Old Do You Have To Be To Get a Loan?

The minimum age requirement to obtain a loan in the United States is generally 18 years old. This is because individuals under the age of 18 are considered minors and, therefore, cannot legally enter into most contractual agreements, including those for loans. 

However, meeting the age requirement is just the first step; for many types of loans, lenders also consider other factors, such as income, credit history, and employment status, to determine eligibility.

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Minimum Age Requirements for Different Types of Loans

Bank Loan

How old do you have to be to get a loan from the bank? The minimum age to get a bank loan typically falls around 18 years old. This aligns with the legal age of adulthood in most jurisdictions, signifying the ability to enter into binding contracts.

Some banks might have stricter internal policies and set a higher minimum age requirement, such as 21. It’s always best to check directly with the bank you’re interested in borrowing from.

Personal Loans

For most personal loans, applicants must be at least 18 years old. However, some lenders may have higher age requirements, such as 21 years old, especially for unsecured loans that do not require collateral.

Auto Loans

Similarly, to qualify for an auto loan, you must typically be 18. Some dealerships and lenders might have specific requirements or offer programs for young buyers with limited credit history.

Mortgages

To apply for a mortgage, you must be at least 18 years old. Due to the significant financial commitment and stringent requirements of mortgages, lenders will thoroughly assess your income, credit history, and employment, making it challenging for younger individuals to qualify without a strong financial background or a co-signer.

Student Loans

For federal student loans, there’s technically no age minimum; minors can apply with the involvement of their parents. However, private student loans typically require the borrower to be at least 18 years old and, like other loans, consider creditworthiness.

Title Loans

Title loans, which are secured loans where your vehicle title is used as collateral, also require borrowers to be at least 18 years old. These loans are typically easier to qualify for than unsecured loans since they are secured by your vehicle, but they come with high-interest rates and the risk of losing your vehicle if you cannot repay the loan.

While title loans are a valuable option for many borrowers who need cash quickly, before you take one, you may want to carefully assess all the risks. Read your contract thoroughly and calculate just how much you will have to repay in order to avoid your car being seized by the lender.    

Other Car Title Loan Requirements

It’s important to remember that age is just one piece of the puzzle. Title lenders may have additional requirements, such as:

• a clear title in your name (meaning your car isn’t being financed elsewhere), 
• proof of income to demonstrate your ability to repay the loan, 
• and a valid government-issued ID.

When applying for a title loan, you’ll often be asked to provide this documentation. Especially for the first qualifier, having a lien-free title is crucial. You can’t take out this loan if you’re not the sole owner of a vehicle or if there are other financial liabilities tied to the title.

Pros and Cons of Title Loans for Young People 

Pros

• Easy Approval: Title loans typically don’t require a credit check, making them accessible for young adults with limited credit history.
• Fast Cash: The approval and funding process for title loans can be very quick, providing near-instant access to cash.
• Application online and instant decision: When you’re applying for a title loan with Titlelo, you can expect the most convenient and quick process. You fill out an online form, and we match you with the right lender, often contacting you with the decision the same day.

Cons

• High-Interest Rates: Title loans carry high interest rates, higher than bank loans. This comes with a risk of defaulting on the loan.
• Risk of Repossession: If you fail to repay the loan, your car can be repossessed, leaving you without transportation.

Alternatives for Borrowers Under the Minimum Age

If you’re under the minimum age requirement for a traditional loan, don’t fret! Here are some alternative solutions.

Talk to family or close friends

Open communication can lead to helpful solutions. Explain your situation and see if they might be willing to offer a loan with clear terms or perhaps help you brainstorm ways to reduce your need for borrowing.

Explore income opportunities

Consider picking up a part-time job or a side hustle to generate the income you need. This can be a great way to build financial independence and a strong work ethic.

Payment plans

Many businesses and service providers offer payment plans that allow you to spread out the cost of an item or service over time. This can be a more manageable option than a large upfront payment.

Government assistance

Depending on your situation, you might qualify for government assistance programs that can help with specific needs like housing or food costs. Researching local and federal programs can be a worthwhile step. 

Conclusion

Remember, age is just one factor lenders consider during a loan application process. Building a solid credit history early is a smart move, and there are resources available for young adults exploring responsible borrowing options.

For title loans specifically, we’ve highlighted the ease of access and speed, but remember, these benefits come at a cost. If you’re considering a title loan, be sure to have a clear understanding of all its terms and only borrow what you can absolutely afford to repay.

Wonder what the application process looks like? At Titlelo, we specialize in finding solutions that work for you. See how you can apply for a title loan with us and whether that is something you should consider for yourself.  

FAQs 

Can you get a loan at 17?

In almost all cases, no, you cannot get a traditional loan at 17. However, there are a few exceptions:

• With a Co-signer: If you have a parent or legal guardian with a good credit history willing to co-sign on the loan, this can significantly improve your chances of approval. The co-signer essentially guarantees the loan and becomes responsible for repayment if you can’t meet your obligations.
• Student Loans: In some cases, you might be eligible for specific student loans even if you’re under 18, especially if you’re enrolled in a qualified program.

What is the smallest title loan you can get?

There isn’t a universally set minimum amount for title loans. It depends on a few factors:

• Lender’s policy: Each title loan lender can have their own minimum loan amount.
• Value of your car: Title loans are secured loans, meaning your car acts as collateral. Lenders typically won’t offer a loan exceeding a certain percentage (often 25-50%) of your car’s value. So, if your car has a lower value, the smallest loan you can get will be proportionally smaller.
• State regulations: Some states, such as South Carolina or Louisiana, might have regulations specifying minimum loan amounts for title loans.

Are Cash Loans a Good Idea?

Cash loans, like title loans and payday loans, can be a valuable solution, but they come with some drawbacks. They often have a quick and easy application process, with approval decisions sometimes made on the same day.

However, title loans use your car as collateral. If you fail to repay the loan, your car could be repossessed, leaving you without a mode of transportation.

Like with any type of financial obligation, it is imperative that you carefully consider all the pros and cons and make a decision that will serve you and your needs both in the short and long-term perspective.