How to get a car loan with NO credit?(Last Updated On: October 12, 2016)
Here are the steps you can follow. First of all, you can open a bank account. If you do not have a history of credit, it always better to start establishing a history by opening a bank account. It is regarded as the first step you are taking to enter into the world of credit and it is the foundation of your loan. In order to open a savings account or basic checking, you will not need prior credit.
And the second step is you should save some money for a down payment. If you want to get your car loan easily, a large down payment will do the job and in the long run you will have to pay less. If possible, you should try to save 10-20 percent of the total cost of the car. The more money you are saving up for the down payment, lesser the money you should pay later on.
After that you should gather all your documents. You might need a copy of the new bank statement, the bills that have been paid like phone and utilities and also the proof of your employment history. By these documents, the lender will get to know that you will be able to repay the loan amount.
Then you must get a cosigner. The cosigner will support to take the responsibility in your payments. You should be very careful about the risk your cosigner will be in. If you won’t be able to make payments, it will fall on the cosigner. So keep a good relationship with the cosigner and take responsibility of your loan.
In order to apply for a loan with no credit, firstly ask your bank about the loans. Than any other place, your financial institution will be able to give a more favorable loan for you. Banks always like to do business with their own customers and you will be treated in a better way unlike for a stranger. You must check with lending institutions and reputable banks before taking an action to find dealerships. The car loan rates should be compared also.
Next you can ask for the car dealerships. If the bank can’t get the loan for you, ask the dealership where you can plan in order to purchase the car and what kind of options they are offering.
As the last step, make sure you make your payments on time after all these actions are taken. Remember to make your monthly payments on the given date.
So, as a summary if we analyze what you need to do in order to get a car loan with no credit, there are steps you should follow. They are, opening a bank account, saving money for the down payment of the car, gathering all the required documents, getting a cosigner, asking from the bank about loans and on dealerships next and making your payments on time.
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