how to get a car loan with no credit

No Credit? No Problem! Here’s How to Get a Car Loan with No Credit

If you’re in the market for a new car, you might be wondering how to pay for it. Getting a car loan is the most typical option, of course, but what if you don’t have a credit history? Can you get a car loan with no credit?


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It’s difficult, but not impossible, to get a car loan with no credit. There are some options available to you, but you might have to get creative. Keep reading for some tips on how to get a car loan with no credit.

How To Get a Car Loan With No Credit: Where to Begin

Before you start on your car loan journey, start saving for a down payment. The more you can save to put down, the better your chances of getting a loan will be.

By saving up a down payment, you’re showing a lender that you’re committees to the purchase and shows that you have the financial responsibility to save up a down payment.

Once you have your down payment saved, you’re ready to start the car loan process. Based on your down payment and budget, you’ll need to decide how much you can spend on a monthly payment.

After you determine this, then you can decide whether to buy a new or pre-owned vehicle and what type.

The first thing you should start doing once you have your down payment ready and have figured out your budget is to start gathering information to document your income and financial responsibility. You’ll want to show the lender that you’re a good risk to take.

Documents to Gather

If you don’t have a credit history, the lender is going to want to see that you can afford the payments and ensure that you’re a good risk and will repay your debt.

Here are some things to gather in order to document your income and financial means.

1. A copy of your bank statement that shows your down payment

2. Copies of any recurring bills, such as a utility bill or cell phone bill.

3. Proof of employment, such as pay stubs which show your income

You can get a bank account without a credit history, so if you do not have one yet, you should open one as soon as possible. You can often get utilities in your name without credit history as well, but you’ll often have to put a deposit down.

While these aren’t considered true credit accounts, they can demonstrate to your lender that you are financially responsible enough to make payments on time and to repay your debts.

Approach a Lender or Car Dealership

Both banks and credit unions offer loans to purchase a vehicle. You should first approach the bank or credit union where you have an account. They can easily confirm your income and review your bank statements and will often be more willing to work with a current customer.

If you strike out with your bank or credit union, car dealerships often offer financing as well. Some even will advertise that they work with people with no or poor credit. Be careful though, and make sure to fully review and understand the terms of your loan.

Whether you get a loan from the bank or a car dealer, you should shop around. Don’t take the first loan that’s offered to you. Remember that you should be looking for a loan with the lowest interest rate and shortest repayment term possible.

Find a Co-Signer

Finding a co-signer who has a strong credit history is another way to boost your chances of getting a loan.

A co-signer is someone else who will be listed on the loan with you and takes on equal liability for the loan. The bill is sent to you, but if you don’t pay, the co-signer is responsible. If they don’t pay, then their credit will suffer as well.

Ask Family or Friends

Your family or friends may be able to give you a loan to buy a new vehicle or at a minimum, act as a co-signer for you.

Family and friends are a great place to start looking for help in financing a vehicle when you have no credit. If they do not have the ability to give you the full loan, it might be possible to have them co-sign on a loan.

If you do find a family member or friend to loan you money for the car, you should set up a repayment plan, including interest, to ensure that you repay the debt.

You can have a legal advisor or notary make the agreement official. Missing a payment or paying late would damage your relationship with your family member or friend and could potentially bring on legal issues, so you should take the debt repayment seriously.

Once you have the cash, shop around at car dealers or even cars being sold by their owner.

If you need cash quickly and already have a car, an auto title loan is an option. You should use these as a last resort, but they are a way to use your car as collateral.

If you need money fast in order to make a car repair, for example, they might be a decent option for you, even if you have bad or no credit. Learn more at Today’s Financial Services.

The Bottom Line

Getting a car loan with no credit isn’t impossible, but will require a bit more work and creativity on your part. Use these tips on how to get a car loan with no credit to help guide you through the process.

In the meantime, start saving up your down payment and work on building a credit history. Start small, with a credit card with a low limit that you pay off each month. Each month that you make an on-time payment, your credit will build.

Once you have your car, check our out blog for tips on keeping your car in top shape and using preventative maintenance to keep your car running.