You'll most likely need credit for some big purchases in life. Your credit will determine whether or not you can get approved for financing for things like a car. If you’re just starting out and have no credit, you may be wondering if you can even get an auto loan.
How to Get a Car Loan
To a lender, someone may not be an ideal candidate for a car loan if they have no credit history. But it can be possible to qualify for an auto loan without having any credit. There are a few steps to take before deciding to take out a loan.
Double check credit history – Even if you're confident there's nothing there, make sure to look at your credit reports. The Consumer Financial Protection Bureau (CFPB) recommends checking these before any major purchase so you can look for errors.
Budget – Check to see how much money can be budgeted for the vehicle, and how much of a monthly payment you can afford. Also, be mindful of saving up for a down payment. Down payments lower the amount financed and the cost of the loan, so it’s something to really think about.
Be realistic – The biggest downside of having bad or no credit is a greater chance of being offered a loan with a higher interest rate. If, after being approved, you aren't able to get the vehicle you want, you may need to face the reality of picking a different car.
If trying to get approved for a loan alone sounds intimidating, there are some alternatives to consider, such as getting a cosigner. It may even be a requirement for some lenders. A cosigner needs to meet specific requirements in order to qualify, such as a steady income and good credit. Having a cosigner on a loan shows that you're serious about the loan and making payments on time.
Ideally, lenders want to see some form of credit history when someone applies for an auto loan. Although there are ways around this, it can be a stressful and tedious experience. Here at Auto Credit Express, we can help find the right dealer for you in your area. Our network of dealers has the lending resources available to work with people in challenging credit situations. Get started today by filling out our free online auto loan request form today!