Getting a Car Loan with No Credit History


Getting a car loan with no credit history is definitely doable. In fact, having no history can be a good history—when you know which moves to make. Here’s how to go about it.

Figure Out What You Can Afford First

Before you set foot on a dealer’s lot or start scanning car listings on Craigslist, sit down and work out your budget based upon your existing income and expenses. This will help you figure out how much money you can afford to put into a car each month.

Remember, there’s more to owning a car than just buying one.

You’ll need to make the monthly payment, insure it, register it, keep it fueled and maintain it. If your pockets won’t let you do all of that comfortably, you’re better off with Uber until your cash flow will let you meet those obligations comfortably.

Check Your Credit History

Even though you might think you don’t have a credit record, you could have one just the same. Got a student loan? You have a credit history. Further, if you’ve had it a while and you’re still in school, it’s deferred, which means it’s in good standing and making your credit score look good.

(Assuming, of course, you’ve done nothing to make it look bad.)

Start with Your Bank or Credit Union

Many financial institutions offer first-time car buying deals for long standing customers. After all, they’ve got access to all of your money and your financial records, so they’re in a perfect position to see how you’re using your money.

While we’re on the subject, a lot of car manufacturers offer first-time deals too. Consult their websites to see what kinds of special offers they might have in place.

Offer a Big Down Payment

This, of course, assumes you have the wherewithal to come up with said huge down payment. If you can, this is one of the best ways to qualify for no credit history car loans. Lenders will respect the fact you’ve put so much on the line and be more willing to work with you.

Demonstrate Solvency

Provide copies of your bank statement, along with your utility bills, phone bills and the like (if you’re current on all of them). Pay stubs and proof of other sources of income are helpful too.

These documents will show you’re making money and capable of using it responsibly. Further, the longer you’ve had your job, the more favorably your application will be looked upon as this indicates stability.

Seek a Co-Signer

If you can find a benevolent individual with good credit who is willing to vouch for you, you’ll get the loan—no problem. Keep in mind though; this person is doing you a huge solid. If you don’t pay, the lender will come after them for the money.

This is why you must be absolutely certain you can pay before you even think about asking anyone to do this for you. As easy a route as it seems, do not take this approach unless you know beyond a doubt you can support the loan.

In addition to damaging your benefactor’s credit record, you’ll do serious damage to your relationship with that person if things go awry.

Getting a car loan with no credit history can be done. Don’t let it stop you from trying to get a car if you need one. Just be certain you can afford it comfortably before you add the associated expenses to your monthly bud

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