PriceProtect™
DriveShield™
GarageGuard™
Services
Insurance
Car Insurance
Compare Car Insurance with Jerry
Jerry’s Expert Advice
Car Insurance Estimates
Home & Renters Insurance
Renters Insurance
Loans
Car Loan
Compare Car Loans with Jerry
Jerry's Expert Advice
Car Loan Guides
Repairs
Car Repair Estimates
Repair Estimates for Popular Services
Advice
Read Car Content
Browse Jerry Car Advice
Check Out Expert Car QnA
Learn About How We Create Content
Jerry Data & Research
Can I get approved for a small car loan with no credit history?
I want to buy a used car for about $7,000. It's not that much money, so I assume that I can get a car loan. However, I have no credit history. What should I do?
Eric Schad · Updated on
Reviewed by Shannon Martin, Licensed Insurance Agent.
It will be hard to get a car loan if you have no credit history—at least by yourself—because lenders have no metrics with which to assess your risk level.
However, if you have a cosigner, your chances of getting a loan are higher. A cosigner is a person with good credit and steady income that assumes responsibility for the loan if you become unable to pay.
If you stay on top of your payments, this person won’t have to deal with the loan; they only need to show up at closing to sign the paperwork.
Additionally, be ready to put down a large down payment (around 20% if possible) to put the lender’s mind at ease and increase your chances of getting favorable terms.
If you can’t find a cosigner and don’t have the wiggle room to give a good down payment, your last resort is to contact a subprime lender or
buy here pay here
car dealer. These two options will most likely give you a loan, but unfortunately, it’s going to come with a heavy interest rate. Still, you can try to
refinance the car
and negotiate a better interest rate after a year or so.Be aware that with any loan, you’ll need to purchase
full coverage insurance
for your new car. But it doesn’t have to cost an arm and a leg. Just use Jerry
to find the best rates!View full answer
- Gregory R.
WHY YOU CAN TRUST JERRY
Jerry partners with more than 50 insurance companies, but our content is independently researched, written, and fact-checked by our team of editors and agents. We aren’t paid for reviews or other content.
Join 4M+ members in lowering their car insurance
You Might Also Be Interested
Read Advice From Car Experts At Jerry
What Others Are Asking
Browse More Content
Insurance for Your Car
Insurance in Your State
Easiest way to compare and buy car insurance
No long forms
No spam or unwanted phone calls
Quotes from top insurance companies
