How to Get a Used Car Loan Without Credit History
Owning a car–or even a used car–can be pretty expensive. Worse, not everyone has the money to buy one even if you urgently need it. Some car buyers opt to get a used car loan from the “Buy Here Pay Here” program as an option to have one; however, you first need to have a credit history.
However, when you do not have a significant credit history or any credit history at all, a lender’s approval can be daunting and make it hard to secure a used car loan. So, are there alternative options to secure a used car loan without a credit history? This article will get you covered with all possible options to get a used car loan without a credit history.
Look past traditional banks
When you do not have a credit history and want to secure a used car loan, it might be rather difficult, particularly when no one knows your ability to pay afterward. Chances are, they will take immense scrutiny if you are trustworthy enough to make monthly payments. Without a credit history, they won’t be able to know.
To get a used car loan without a credit history or co-signer, you will have to seek past traditional banks. You can also give a closer look into alternative lenders. Big banking institutes are unlikely to grant you a used car loan without good credit history or a co-signer.
Other lenders, such as “Buy Here Pay Here”, may be willing to give you a used car loan without a credit history. However, they will still take immense scrutiny on your ability to pay the needed bills, as well as your income. The chances of getting a used car loan through “Buy Here Pay Here” are high even if you do not have the credit to prove your reliability.
Seek for the best no-credit used car loan
Having your first used car loan can be exciting, as well as a vital step towards building your credit history. If it is done rightfully, it will help you open opportunities for your future borrowings. It all begins with looking at a used car and financing options that you can afford. Once you have your budget down, you may consider dealer financing, getting pre-approved by your bank to save you in interest fees over the years, or through online lenders.
However, it is imperative to do your research on the lender and make intense scrutiny before giving out personal information. You may also opt to check for reliable customer services and double-check for reputable reviews.
Negotiate a better deal with “Buy Here Pay Here”
While it may seem obsolete, it is important to negotiate the terms of the “Buy Here Pay Here” before getting a used car loan. Up for negotiations include sticker price and trade-in values. Do your research, go to the dealership prepared, and know when to reflect to get the best deal. You may also bring documentation of other on-time payments. These documents will prove that you can be able to make other payments on time.
Make a significant downpayment
Making a large down payment can prove to the used car lenders that you are serious about the deal. From the reference point of the lender, a significant downpayment shows that you are a safer bet to repay the used car loan. From your standpoint, there are countless benefits to this as well. A cash upfront can allay the effects of depreciation, which keeps you from going outside of your used car loan.
With the aforementioned, getting a used car loan with a “Buy Here Pay Here” program is seemingly easier than transacting with traditional lenders. If you are interested in used car shopping, these are the benefits that you can expect.
However, no set solution works for everyone, more so, getting a used car loan without a credit history. Most importantly, you should look at potential auto loans like “Buy Here Pay Here” from a long-term perspective. Consider the amount you will spend on interest over the whole life of the used car loan, and get to know the moving parts that can cost you over the years. Lastly, be realistic about your credit situation, and consider waiting to buy and build credit.
Whatever you choose, know that your used car loan is the first step on your credit journey. Hence, make it a positive one, and you could reap greater benefits and opportunities to borrow in the future.