For an individual to get a car loan with no credit, he should save enough money for a sizable down payment, document his work history and compile a record of the timely payment of his recurring bills. He can consider asking a family member or friend to co-sign on the loan.Continue Reading
When making a car loan, a financial institution assumes less risk if a borrower has a large down payment, and the fact that he has saved money for the down payment demonstrates financial discipline. Employment verification showing a stable work history and sufficient income can be crucial to getting a first loan, so the borrower should be prepared to show several check stubs. While not establishing credit history, the timely payment of utility or phone bills demonstrates the ability to meet recurring financial obligations.
Maintaining an account in good standing with a bank or credit union for a borrower opens the door for him to talk with them about potential financing prior to visiting a dealership. Most lenders are more likely to extend credit to customers that have a deposit relationship. If the individual's bank refuses to give him a loan, dealership sometimes offer financing as well. When asking a friend of family member to co-sign on a loan, one should be certain they understand the financial obligations that are involved.Learn more about Credit & Lending