If it’s a dealership with a good name brand and a good reputation that has links with a big car marketer, it might be in your interest to make a couple of calls to the financing manager and ask for a few details on the loan.īut can they work with someone that has no credit whatsoever? And if so, what would they need from you to give you this loan? It may be your job history, or maybe a co-signer – but if you can give them what they ask of you, you may be able to strike a good deal. You’ve likely seen the advertisements everywhere: “no credit – no problem.” So, if you are a buyer that has bad or barely any credit to show, can you still get a loan from your average name-brand car dealer? Well, that mostly depends on the dealer. These tend to be more flexible, and the interest rates are also generally more convenient. In some cases, you might want to move past car loans – and move onto personal loans. The bad news is that not every lender will use this kind of alternative credit score model – which is why you might have to do some research before locking into a certain lender. They just have to use credit scoring formulas, such as the FICO score XD. When the traditional proof is not available, lenders can make use of the non-traditional ones to demonstrate your ability to make your payments on time. However, you still have your checking account, your utility bill, your cell phone, and your rent. So, you don’t have a credit card, nor do you have a mortgage – which means you don’t actually have anything to help you build your credit history. Plus, whenever you make a late payment or miss one altogether, this will go permanently on their credit score – not yours.įor this reason, if you do decide to get a co-signer, make sure that you have the funds to make the necessary car payments whenever they are due. For instance, if you default on your loan, they will be responsible for making the payments for you. However, if you decide to get a co-signer, you need to be very careful – as your actions will affect them in the long run as well. Also, the lender will see them as a scapegoat in case you decide that paying loans is just not your style. When you have a co-signer, you will be able to practically “borrow” from their credit history, making you seem like you are more reliable. However, if you walk in with a co-signer you’ll see things changing. If you walk into a bank or in the office of a lender by yourself, with no credit history and no guarantor to vouch for the fact that you are actually the kind that pays their debts, there is a very good chance that you will end up with a big “no” in your face and the doors (figuratively) shut in front of you.
Technically speaking, if you can find a personal lender that will give you a car loan without a credit history at a good interest rate, then you don’t really need a credit card. This is why people prefer loans instead of credit cards. However, bear in mind that a credit card may come with very high interest rates – so, you might end up having to pay as much as 1/3 of the value of the car only in interest. When you have a line of credit that is healthy enough, you may use the actual credit card to get the funds for your loan.
3 Simple Steps to Applying for a Personal Loan for a Car.6 Options to Explore Before Getting a Car Loan.
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