How does a person working part time, with a limited credit history and no money for a down payment, get a loan for a used car?

I live with my parents, I have a part-time retail job, I have a short credit history, and my only monthly bills are for my phone and car insurance. I want to buy a used car that costs no more than $10,000, but I don't have any money to put down. What's my best option for getting a car loan?

Answer
The good news is that you have many things going in your favor. Even if you only have limited income from a part-time retail job, you still have little to no debt or financial obligations. Without rent or a mortgage, your debt-to-income ratio — one of the greatest factors in loan approval — should be below the industry max of 43%.
If you have parents with good credit who trust you, have them cosign on the loan. Not only will this garner strong approval consideration from lenders, but it will also help you build the credit you need for future purchases. In addition, you should consider small banks or credit unions, as these two types of institutions may have lower rates and be more willing to work with you on your first-ever car loan.
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Eric Schad
Answered on Mar 12, 2021
Eric Schad has been a freelance writer for nearly a decade, as well as an SEO specialist and editor for the past five years. Before getting behind the keyboard, he worked in the finance and music industries (the perfect combo). With a wide array of professional and personal experiences, he’s developed a knack for tone and branding across many different verticals. Away from the computer, Schad is a blues guitar shredder, crazed sports fan, and always down for a spontaneous trip anywhere around the globe.
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