When you have no credit, it can be difficult to find a place that will accept you for a car loan. Here are a few tips to help you out:
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Talk to your bank or credit union.
Even if you have no credit, your bank or credit union may be willing to give you a car loan. They may require a co-signer, but it’s worth a try.
Look for a subprime lender.
A subprime lender specializes in loans for people with bad credit. They may be willing to give you a loan, but you’ll likely pay a higher interest rate.
Find a cosigner.
If you can find someone with good credit who’s willing to cosign for you, it will be easier to get a loan. Just make sure you’re prepared to make the payments on your own, because if you default, the cosigner will be on the hook.
Use a collateral loan.
If you have something of value that you can use as collateral, such as a house or a car, you may be able to get a collateral loan. This is a risky option, because if you can’t make the payments, you could lose the collateral.
Get a credit card.
If you have no credit, you may be able to get a secured credit card. With a secured card, you put down a deposit, and then you’re able to use the card up to the amount of the deposit. This can help you build up your credit so you can get a regular unsecured credit card and eventually a car loan.
Consider a lease.
Leasing a car may be a good option if you have no credit. You’ll likely need a co-signer, but it can be a way to get into a car without a loan.
Look for a dealer that specializes in bad credit.
There are some car dealerships that specialize in helping people with bad credit get financing. They may be able to help you get a loan, but you’ll likely pay a higher interest rate.
Save up for a down payment.
If you can’t get financing, you may be able to buy a car with cash if you have a big enough down payment. This will likely mean buying a cheaper car, but it may be your only option.
Try a buy-here, pay-here dealership.
With a buy-here, pay-here dealership, you can buy a car and make your payments directly to the dealership. These dealerships typically don’t require a credit check, but you’ll likely pay a higher interest rate.
Look for government programs.
There may be government programs available to help you get a car. For example, the Department of Transportation’s Vehicle Affordability Program offers financing for people with low incomes.
If you have no credit, it can be difficult to find a place that will give you a car loan. But it’s not impossible. Talk to your bank or credit union, look for a subprime lender, or consider a lease. You may also be able to get a collateral loan or a credit card. Or, you can save up for a down payment and buy a car with cash.