Can I Get an Auto Loan with No Credit?

People need a car. For most people, that means getting an auto loan.

Whether you're just starting out or you're fresh out of school, not having established credit causes concern for many people, which leads to the following question:

Is it really possible to get an auto loan with no credit?

Yes. It's definitely possible to get an auto loan with no credit. However, it can be much different from those who have a great credit score and history.

For instance, getting an auto loan with no credit may mean you have to opt for a quality, affordable car that makes sense for your situation. That may mean you have to put off that dream car for now.


Furthermore, you may get an interest rate that is higher than if you had good credit established. The good news is that if you are responsible in paying your auto loan, you may be able to refinance your auto loan and receive a substantially lower rate over time.

Another way some people get the auto loan they desire without credit is by having a co-signer. This means another individual with credit signs the loan and makes themselves responsible for the loan in the case you are unable to make the payments.

Here are some things you may want to do when trying to secure an auto loan with no credit:

  • Save up for a down payment - Go for at least 10 percent. This will demonstrate responsibility and commitment to the lender while lowering the payment of your loan.
  • Have proof of employment - Showing that you are gainfully employed and earning an income often reflects favorably on you in consideration of an auto loan.
  • Have documented history of bill payment - In addition to earning an income, paying your bills is proving financial responsibility and commitment that is necessary for paying back a loan.

If you don't have established credit and have questions about obtaining an auto loan, it's better to be informed and prepared. Talk with a professional at your credit union or bank to learn more and prepare yourself in advance. That way when the time comes to purchase a car, you understand what you need to do to get that auto loan you desire.

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