subject: No Credit Auto Loans - Getting An Auto Loan For The First Time [print this page] It would be nice to buy your own car to save you the hassles of commuting especially when you need to drive to work. However, if you have never experienced having credit in your name, it will be a little difficult for you to finance a new or a used car. Despite this, there are ways that you can obtain a loan even if you do not have any credit history yet.
There are numerous auto lenders that are offering car loans for different situations, whether you have a credit history or not, you have good credit or you have bad credit, or you had a recent repossession. For first time car buyers, there are a few things you can do to get your loan application approved.
Build Your Credit History
The first thing you can do is apply for a credit card or even a gas card. This will allow you to start building your credit history. Also, be sure you have a bank account as this will help as well. Make sure that you pay all of your bills on time. This way, the car lenders would have an idea on your credit card habits and how you are managing your budget properly.
You only need to pay for the credit card or gas card for six months. However, this method may take some time and it might not be too ideal especially if you are in dire need of a car.
A credit history will increase your chances of being approved for a car loan. Aside from that, if you do not have a credit history, you will be most likely paying higher interest rates. Having a credit card can help you to have a low interest rate car loan because these lending companies would prefer applicants who already have a credit history.
Get A Cosigner
The other way to obtain a loan with no credit history is to get a cosigner. Do you know anyone who could be partly responsible for the loan? A cosigner will guarantee the lender or the financial institution that you will be able to make payments on time and if you do not pay on time then the cosigner will be responsible for it. Through this, your application for financing a new or used car would be easily approved and you will be able to get your own car in no time.
You might not be able to get a loan over night without having some credit established but there are some ways around it.
by: Chris Layton
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