Can I get a car loan without credit?

I don't have credit. I never got a credit card, and I've never made a big purchase that required it. I've always saved up to pay for everything outright. I thought I could save up enough for a car, but I can't. Is it possible to get a car loan without credit?

Answer
It’s awe-inspiring that you’ve managed to avoid using credit up until now. You would think that sort of financial discipline would help your credit!
Fortunately, you can still get a car loan without credit. You’ll just need to find specific lenders who work with people with no credit or enlist the help of a cosigner.
First, do some research:
  • Figure out which car you want, down to the VIN.
  • Find out how much it is.
  • Determine how much of a down payment you can afford and how much of a loan you will need.
  • Then, look for lenders that cater to your needs.
Dealerships tend to lend to people with no credit. Certain banks, credit unions, and online lenders may, as well. But beware of high interest rates and term lengths over 60 months. These characteristics make for bad loans.
If you can’t qualify for a loan by yourself, you could ask a cosigner to help. This person will need to have a credit score of around 660 or higher. Most often, borrowers look to family members or friends to cosign.
Note that the cosigner would be on the hook if you failed to pay the loan on time. This can potentially tarnish both of your credit scores—and even ruin your relationship. So, be sure you’re in a good financial position before roping someone else into your loan.
If you are unhappy with the interest rate you qualify for, don’t worry. You can still purchase a vehicle now, then refinance into a lower-interest loan after making several on-time payments and improving your credit score.
Refinance quickly and easily through the Jerry app. On average, those who refinance pay $85 less every month.
Lauren Smith
Answered on Nov 19, 2021
Lauren has written for World Nomads, the Matador Network, Korvia Consulting, and once upon a time Three Fates Games. She graduated from Columbia College of Chicago with a BFA in Creative Writing. After graduating, she moved overseas and lived in South Korea where she spent her free time traveling and going on road trips with friends. She misses the rest stop potatoes and is trying to figure out how to recreate them at home. She's now based outside of Chicago and when she's not writing she spends her free time reading, playing video games, and exploring whenever she can.
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