Can someone with no credit get a car loan?
I want to purchase a new car now that my old one is on its last leg. However, I’ve never had a credit card. Will lenders approve a car loan for someone with no credit history?
Don’t stress if you don’t have credit and you want to get a car loan. According to a FICO study, about 22% of Americans don’t have any credit history or score. If you want to get a car loan without credit, shop around at credit unions, buy here pay here establishments, or lenders who work specifically with those who have no credit.
Before you start applying for car loans, consider getting a credit card. This will help you build credit so you have something on your credit report when you apply. Note that this may take a few months to see an effect on your credit report.
Once you’ve built a bit of credit, you have three lenders who will likely work with you:
- Credit unions
- Specialized lenders
- Buy here pay here establishments
These lenders may work with you, but your interest rate on the loan is going to be far higher than someone with an established credit score. Even so, shop around until you find a decent interest rate.
Once you get approved for the loan and purchase the car, continue to make your payments on time. After a year or two, your credit score may have reached the point where you can refinance the vehicle at a better rate.
To save more money to pay down your initial loan, compare your current car insurance premium with quotes you find on the Jerry app.
As a licensed broker, Jerry can help you find and compare quotes from over 50 top providers, including Nationwide, Allstate, and Travelers. When you find a better rate, Jerry can help you buy your new coverage and even cancel your old policy!
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