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Tips for Getting a Car Loan with No Credit

How to Shop for an Auto Loan with No Credit History

Are you excited to purchase your first car? Haven’t yet started building a credit background! Don’t worry, you may still be qualified for a car loan! Of course, there are ways you can better your chances of securing a great deal on an auto loan even without credit. Here are a few tips you should consider when shopping for a car loan with no credit.

Save Money for a Down Payment

Before shopping for your car, you should save money for a down payment. Many lenders require a down payment for a car loan, especially for buyers with challenged or no credit. Of course, saving for a down payment has plenty of benefits for the borrower as well, such as a lower loan principal, less interest being accrued, smaller monthly payments, and possibly even a shorter loan term.

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Provide Proof of Income

Ultimately, lenders want to make sure that you can afford the car that you are interested in. You will need to provide proof of income, like a recent paystub or W-2, to show the lender how much you are earning and that you have a consistent flow of income.

Consider a Co-Signer

If you want to boost your odds at getting a car loan without any credit history, consider a co-signer. A co-signer is someone who signs for the loan with you in the hopes of possibly giving you a lower interest rate. It’s very important to remember that your co-signer, if you choose to get one, is someone that you fully trust. Additionally, your co-signer must fully trust you as well, as their credit score is also on the line if payments are late or missed.

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