Are No Credit Car Loans Still Available?

If you need a car but have no credit history or a bad credit rating, you may still be able to get a no credit car loan despite the recent credit crunch (although is has gotten much, much more difficult). There are lenders available who will give you a loan because loans for cars are different from credit card or personal loans which are not secure. An automobile loan is a secure loan so you most probably have a chance at getting the car you need. There are certain steps you should take before you apply.

Try to establish some credit before applying for the loan. If you have home utilities, a cell phone account or other references that prove you have a history of paying your bills on time it will help. You can also open a checking and savings account. If you use it properly, without overdrawing or writing bad checks, your bank will give you a reference for a car loan. A statement of proof of employment from your employer will also help.

Making regular payments on a credit card will also help and gas or department store cards are easier to get, but you must not miss a payment. Make sure the card you get reports to a credit bureau so your payments will be advantageous. For this to improve your rating or history it will take several months.

Another step you should take is to find a family member or friend with good credit who is willing to co-sign your loan. A spouse or parent can be the co-signer. Remember, if you are not able to make your payments on your new car loan, it will hurt the credit rating of your co-signer too.

Take some time to research the different loan possibilities from credit agencies and several banks. If you have an account, your bank may help you. You may also be able to refinance your loan for a lower rate after some time when you have proved you are making regular payments.

Before you take the time and effort to find the car you want it would be better to look into a no credit car loan first. You need to see how much it is possible for you to borrow because this will determine the type or model of car you buy. Another tip to save you money, purchase any warranty on a used car separately from the car price. Then it will not be added into your monthly payment.