How to Get an Auto Loan with No Credit
- 1). Obtain a copy of your credit report. Even if you have very low credit, you should still have a credit report and you'll need to check it for errors or omissions. If you receive a notice that there is insufficient information for your name and Social Security number, that's the same message potential lenders will also see.
- 2). Save up for your car down payment to increase your chance of getting a car loan even without good credit. A large down payment will increase your odds of getting a loan.
- 3). Calculate how much you can afford to spend on a vehicle. One rule of thumb is that your annual transportation costs, including vehicle payments, maintenance, fuel and tolls, should be no more than 10 percent of your annual income. On a monthly basis, that means your total vehicle costs on a $3,000 income should be only $300. If fuel and repairs are $100, you can potentially afford a $200 payment.
- 4). Visit your bank, or if you don't have an account, set one up right away. Then discuss a line of credit or auto loan with the branch manager. Let her know your credit history, income, savings and assets and she will determine if the bank can make a loan for you. An auto loan from your bank is the first choice and you may get lower rates than when you buy from a dealer.
- 5). Visit your auto dealer with your budget in hand and the loan offer from your bank if you received one. If you didn't get a loan from the bank, approach the dealership manager with your specifics and find out if the dealership can issue a loan with your vehicle purchase. Be sure to emphasize your down payment, which will hopefully help you secure a auto loan with no credit.
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