Can You Get a Loan at 17? Your Options Explained

For many 17-year-olds, financial independence is appealing, often leading to questions about obtaining a loan. Borrowing money at this age involves understanding specific legal frameworks and practical considerations. While direct access to loans for minors is generally restricted, avenues exist to access funds or build financial readiness with adult involvement.

The Legal Age for Financial Contracts

In the United States, the ability to enter into legally binding financial contracts, such as loan agreements, is tied to reaching the “age of majority.” This age is typically 18 in most states, though a few states may have it set at 19. Until an individual reaches this age, they are considered a minor and generally lack the legal capacity to independently form contracts.

Any loan agreement signed solely by a 17-year-old is likely voidable. This means the minor could legally cancel the contract at any point before or shortly after reaching the age of majority, without penalty. This protection exists because minors are presumed to lack the full understanding and maturity for complex financial commitments. Lenders are hesitant to issue loans directly to individuals under the age of majority due to this inherent risk.

There are limited exceptions where minors can enter into contracts, primarily for “necessities” like food, shelter, and medical care, or in cases of legal emancipation. However, these exceptions do not typically extend to general purpose loans. Therefore, for most financial products, a 17-year-old cannot legally obligate themselves to a loan repayment without adult involvement.

Accessing Funds as a Minor

Given the legal restrictions on minors entering into loan agreements independently, the most common and practical way for a 17-year-old to access significant funds is through the involvement of an adult. A co-signer, typically a parent or legal guardian, can provide the necessary legal capacity. When an adult co-signs a loan, they assume primary legal responsibility for repayment if the minor defaults. This arrangement allows the minor to benefit from the loan, while the lender has a legally responsible party to pursue for repayment.

For certain loans, such as some student loans, parental involvement is a common pathway. Federal Parent PLUS Loans, for instance, are designed for parents to borrow on behalf of their dependent undergraduate students. The parent is the borrower and must meet specific credit and eligibility requirements, including being a U.S. citizen or eligible non-citizen, and their child being enrolled at least half-time. These loans can cover up to the student’s cost of attendance minus other financial aid, with the parent responsible for repayment.

Another avenue for accessing funds, particularly for building credit, involves secured financial products. A secured credit card, for example, requires a cash deposit that often serves as the credit limit. While a 17-year-old cannot open their own credit card, a parent can obtain a secured card and add the minor as an authorized user. This allows the minor to use the card while the parent retains ultimate responsibility and the security deposit mitigates risk for the issuer. Similarly, a secured loan might be possible where an adult’s asset is used as collateral, with the adult as the primary borrower.

Building Financial Readiness

While direct loans are generally not an option for 17-year-olds, this age presents an opportunity to establish habits and accounts that foster future financial independence.

A first step is opening banking accounts, such as checking and savings accounts. While minors typically need a parent or guardian to co-own or act as a custodian, these accounts provide a safe place to manage money and learn basic banking functions. This experience helps in understanding deposits, withdrawals, and balance management.

Budgeting and saving are fundamental financial concepts a 17-year-old can begin to master. By tracking income and expenses, and setting savings goals, they can develop responsible money management skills.

A part-time job can significantly contribute to this learning process by providing regular income and demonstrating the value of earning and managing money. This experience can also show future lenders an ability to generate income, a factor in loan eligibility.

Building a credit history is another important long-term step. Although a 17-year-old cannot open their own credit card, becoming an authorized user on a parent’s credit card can help. The parent remains responsible for the account, but the minor’s activity may be reported to credit bureaus, contributing to their credit file. This can provide a head start on building a positive credit score, beneficial when they are old enough to apply for loans or credit cards independently. However, the primary cardholder must manage the account responsibly, as their payment behavior impacts the authorized user’s developing credit history.