Getting a car loan without a loan can be difficult, but it’s not impossible. One of the most obvious things you can do to help you get a car loan is saving money. The higher the payment, the better your chance of getting a loan. The payout shows your commitment to buying and shows that you have some hard work invested. Once you have the payment, you are ready to start your car buying journey.
Start by obtaining some documentation, then ask for help from family and friends, and finally ask your bank or car dealer for a loan.
A major factor in getting a car loan approval is your credit history. If you do not have a credit history, the loan will look elsewhere to confirm if you can afford to pay. And confirm the probability that you will repay your debt. Collect the following documentation to substantiate your history.
- A copy of your statement bank
- Documentation of any recurring invoices, such as a utility or telephone bill
- Proof of employment history, multiple payroll needs work
It is important to have all the above documentation. Credit history is not required to open a bank account, but it will confirm that your account is in good standing. Utility and telephone bills are also easily set up with no credit history and can provide evidence to the lender that you can pay your billing bill in a timely manner.
A source of steady income is also important. The longer you have been with one employer, the better because the loan pointer can hold the business.
Ask your family and friends
Family and friends are a great place to start looking for help financing your vehicle when you have no credit. If they do not have the ability to give you a full loan, it may be possible to sign them on a loan.
A co-signer is a non-lender who signs the bill of exchange and thus assumes equal responsibility for it. To put it simply, use someone else’s credit score to buy your vehicle. The bill comes to you, and if you don’t pay, the cosigner has to pay or his credit will be compromised. A late payment can not only damage the credit of your family members, but also your relationship. If you get full credit from someone you know, set up a solid repayment plan so that the situation is less likely to become sticky.
- Agree on a specific interest rate and repayment timeline
- Print depreciation schedule, bankrate.com has a free calculator
- Always make your payments on time and do your best to pay early
Ask about a loan from a bank or car dealer
Start at a bank or credit union where you have an active account. They will have easy access to your account history and are more likely to give you credit if you have a previous relationship with them. If you do not have a bank account, set it up as soon as possible. Find help setting up a bank account by reading “How can I easily open bank accounts”. You are more likely to get better deals at your bank than cars.
However, if your bank is unable to help you, try a car dealership. Whether you are at a bank or a car dealer, you have the documentation you have gathered from the list above ready to go.
An auto loan can be complicated to obtain without a prior loan. Building good credit is vital to your financial future. For great tips on building good credit, see “How to Build Credit.” With a little planning, you’ll be riding your new set of wheels in no time.