It’s the perfect case scenario: you have cleared your driving test and you have been saving to buy your dream car for a long time. However, before signing that dotted line on your auto loan agreement, there is an element of hesitation in the air; stemming from the fact that you don’t have any credit history. Your credit history can be a deciding factor in knowing whether your auto loan is approved or rejected. Many a times, however, there just isn’t enough credit history to get started with.
There might be many reasons why a person has a zero credit history. Usually, college graduates and teenagers have no credit history because until now, there wasn’t any chance for them to establish a credit record.
Another instance of people with zero credit history is recent immigrants who moved to a new country and haven’t applied for an auto loan, as they mostly prefer to make cash transactions. But applying for a loan can be a good thing, especially when you borrow wisely and sincerely pay off the debt in the given term period. Also, an auto loan means that you can save the amount equivalent to a car and invest it elsewhere. If you have newly graduated from college or moved to a different country, the amount you save can be of incredible help to you.
So, how can you qualify for An Auto Loan with No Credit History?
Find a Cosigner
Increase the Down Payment Amount
Spot a Suitable Loan
A co-signer is typically someone who adds his or her name to your loan, thereby agreeing to repay the loan on your behalf, if you default on the loan. Being a first time car buyer, a co-signer with a good credit rating can be a huge factor in getting approval for your no credit auto loan.
The only measure of checking if you can repay your auto loan is to maintain a good credit history. However, in the absence of a credit history, a co-singer with a good track record can act as a back-up if you cannot repay your loan. Therefore, having a co-signer instills a sense of security in your auto lender and he will be more willing to give you an approval for the auto loan.
An auto lender is more likely to approve your auto loan if you are willing to pay a hefty down payment prior to availing the auto loan. Usually, a twenty percent of the car price is considered to be a good amount for making down payment. However, if you can pay an amount greater than the customary amount on the down payment, you are more probable to drive off with your auto loan. The reason behind it is that a hefty down payment reduces the overall loan amount and the auto lender is assured of your payments.
Different auto lenders may propose varied auto loan programs depending on your situation. There might be some auto loan programs tailor-made to your specifications, say; some may be designed for students out of college while others may be drafted for residents new to the country. Keep an open eye for such accommodations that may fit into your auto loan program.
Being a first time car buyer without any credit history is not all that difficult. There are many auto lenders who provide auto loans to people with no credit history. Keep those above points in mind and, soon, you will be closing your first auto loan deal for your new car.
If you want to close the auto loan deal successfully, apply with Car Destination. The online auto financing company is famous for providing stress-free pre-approved auto loans to no credit car buyers. Apply now and forget worrying about no credit auto loans.