Obtaining car loans with no credit can be difficult, but not impossible. Most lenders prefer that a borrower have some type of credit score since your financial history aids the lender in their decision in approving or denying the loan. Essentially, without a credit history, the lender has no way of knowing what type of borrower you will be. Lenders can’t tell if you are high risk or someone who will pay the loan back on time. Fortunately, there are banks and dealerships who are willing to finance auto loans with no credit, but you must do some research to find the best options available to your specific situation.
Car Loan for First Time Buyers
Some lenders have programs geared specifically for no credit car loans and first time buyers. These programs are ideal for people with a long employment ad residential history. Someone who has worked at the same company for two or more years and has lived at the same residence for many more has a better chance for approval. There are also some lenders who have first time buyer programs aimed at college students. It is important to check with your bank or credit union to find any available programs that you may qualify for.
Another option in securing auto loans with no credit is to save up a large down payment and/or find a co-signer. A good sized down payment shows the lender that you are able to save money and are committed to paying for your car loan. Your down payment essentially works as collateral since banks understand you don’t want to lose a large sum of money. Additionally, a co-signer offers lenders the peace of mind that they will get their loan paid back. If you can come up with a down payment and/or a co-signer, you will most likely find a lender who is willing to work with you and qualify your loan.
Auto Finance Companies
If you find yourself without a down payment or co-signer, you still have options available to you. You can go online to an auto finance company or find a dealer in your area that specializes in bad credit auto loans. Even though you don’t have bad credit, a dealership that finances people with poor credit will also finance auto loans with no credit. Dealerships that finance poor and no credit can usually be found in your local newspaper. If approved directly through a dealership, you will then purchase your car from that dealer. In this case, the dealer becomes both the bank and seller.
At an auto financing company, such as BlueSky Auto Finance, you can go online and apply for financing through one of our many lenders, banks, and dealerships that we are integrated with. Once your application is submitted, BlueSky will immediately notify you if a bank or institution has accepted your application, and if so, what steps to take. Keep in mind that you are not obligated to accept any financing offered to you from BlueSky. We simply notify you of any banks or dealerships who are willing to offer you a loan in your search for auto loans for no credit.
For more information on BlueSky Auto Finance, click here.