Getting a car loan without a credit history is not as difficult as you may think. There are several programs available to you. In general, you will find it easier to get a loan for a used vehicle, though. Try these options.
- How much do you have for a down payment? Most lenders will not consider making a loan to an individual with no credit history if they do not have at least 10-20% percent of the purchase price as a down payment.
- Ask a parent to cosign. Most lenders will be willing to overlook your lack of credit if you have a parent or other trusted relative cosign – as long as they have sufficient and income themselves. Just keep in mind, the cosigner will be fully responsible for the loan if you, as the primary borrower, miss your payments. In fact, lenders will typically go after the cosigner first if the loan is delinquent, since they have a better chance of recouping the funds from this individual.
Have a sufficient down payment and/or a cosigner? Why not apply for financing through us? It’s fast, easy, and same-day approvals are enjoyed by most applicants. Your loan will be funded through a dealer or lender in your area.
Other Financing Options for People with No Credit History
- If you have an even larger down payment, could you purchase a less expensive car? It is possible to get a secured auto loan. In this instance, you put your cash in a savings account that the lender places a lien against. The savings account actually secures the loan, making you less of a risk from the institution’s point of view. The loan builds your credit history/score and your money will be available to you after the loan is paid off. Credit unions make these loans more often than any other lender.
- If you are still unable to secure a loan, would you be able to wait for about six months to purchase? If so, then look into a secured credit card. Even if you only have a $500 limit, having this card on your file will boost your FICO score and provide the seed of a credit history.