Car Loans For People With No Credit

There are in fact a couple of ways to get car loans for people with no credit. If you have no credit history then it is fairly easy to get a little bit to establish a credit history so that you can get the car loan that you want. However, there are ways to get a car loan with no credit if you don’t want to wait the few months that it will take to establish your credit. There are actually a few options for car loans for people with no credit history. We’ll go over a few of the different ways that this can be accomplished here and you can choose the best option for you.

It’s much easier to get financed with no credit than it is with bad credit contrary to popular belief. The reason that this adage exists is that sometimes finance companies are hesitant to offer credit to people with no personal credit history because if you are going to be a risk, they aren’t sure how much of a risk you’re going to be. That’s why its so important to build your credit right the first time. Even a tiny little loan of two payments that you paid off will allow you to get financed faster than if you had no credit history at all.

If you want to finance a car and you have a perfectly clean credit report with nothing on it, then I actually recommend applying for a credit card instead. Getting a credit card is fairly easy if you have nothing on your credit and if you use it successfully for a few months then you will have built up a payment history, albeit a small one, and you’ll be able to likely quality for a car loan even if you have no credit history. Of course, you’ll also need the income to back that up, so that they know that you are going to be able to make the payments and it helps to have lived at your current address for a year or more as well.

Another option for buying your car with no credit history is to go through your bank, especially if you have been banking there for years and have a history, or your parents have banked there for years. Your bank might be willing to take a chance on you for a loan with no credit history since they know you a little bit. Also, your parents could co-sign for a loan for your car. Then you’d be able to establish that credit history with your bank, pay for your car and have them reporting on your credit as well. By the time that the loan and the car payments are paid off you will have a great credit score.

Car loans for people with bad credit are harder. If you have bad credit and have been turned down by conventional finance companies and car lots then you might consider a buy-here-pay-here car lot. This type of car dealership doesn’t do any credit checks and they will finance pretty much anyone, provided that you have a sizable down payment, generally about 25 to 35 percent. They’ll also need to see proof that you have an income and may require weekly or biweekly payments with a clause in the contract that they can repossess after only one missed payment.