What is a NINJA Loan

A NINJA loan is a slang term for a loan extended to a borrower with "no income, no job and no assets." Whereas most lenders require the borrower to show a stable stream of income or sufficient collateral, a NINJA loan ignores the verification process.


NINJA loans are a type of loan that bases the credit approval decision on a borrower’s credit score with no consideration for income or assets. These types of loans were more common prior to the 2008 financial crisis. After the 2008 financial crisis, regulations were implemented to improve standard lending practices across the credit market.

NINJA Loan Applications

NINJA loan applications do not require details on a borrower’s job, income or assets. These types of loans require only a borrower’s credit score taken from a hard inquiry on their credit report. A NINJA loan application can be processed quickly. Since this type of loan does not require any information on the borrower’s job and income it is possible for a borrower to be approved with no income. NINJA loans also do not require any collateral. Therefore, these loans are not secured against any type of assets.

While NINJA loans do not require any income verification, the borrower must still have a qualifying credit score. Most NINJA loans are provided through subprime borrowers. Thus, credit score requirements may be lower than mainstream lenders.

NINJA loans are structured with varying terms. Some may offer a low initial rate that increases over time. These loans are a very risky proposition for lenders. They are also even more high risk for borrowers since they do not have steady income for making monthly payments at the time of the loan application. Taking a NINJA loan requires a borrower to repay the debt over a scheduled timeframe. Defaulting on the debt can harm a borrower’s credit score and cause legal action to be taken for collecting the debt.

Dodd-Frank Legislation

The 2010 Dodd–Frank Wall Street Reform and Consumer Protection Act created new standards for lending and loan applications in the credit market. As a result, the Act primarily did away with NINJA loans. Under new regulations for lenders, issuers are required to gain more comprehensive information about a borrower including not only their credit score but also their employment and income. For borrowers this requires much more paperwork and information than was needed prior to 2008. For lenders it also requires more verification and slightly higher costs involved with managing the verification process. Due to the high level of defaults that led to the market’s crisis and subsequent real estate crash, loans post-crisis are more highly regulated than ever with mortgage loans seeing the greatest effects.