Shopping for a car is exciting, but paying for one can be intimidating. Not having credit can make it difficult to get car loans, but it is not impossible. Here are four simple steps you can take to assist you in purchasing a car.
Save Money
Saving up for a down payment is one of the most helpful things you can do. By establishing a fund that you will use to begin purchasing the car, you show lenders your commitment and hard work invested in the purchase. There is an added bonus to saving for a down payment. The larger your down payment, the smaller your eventual monthly payments will be.
Gather Documentation
If you do not have credit history, lenders will need other documentation to prove your ability to pay your car loan. A copy of your bank statement will prove any savings you may have. Copies of recurring bills, like a phone or utilities bill, will prove your ability to pay on time. Pay stubs will prove your regular income. Gather all this information before approaching any lenders.
Ask for Help
Friends and family may be able to co-sign a loan for you. Cosigners use their credit to help you get a loan. While this can be exceptionally helpful for someone who does not have credit, it does make it important that all bills are paid on time. Late payments become the responsibility of the cosigner.
Shop Around
When you do not have credit, best place to begin looking for car loans is at a bank or credit union where you are already a member. This established relationship might be helpful in obtaining a loan. If your bank cannot help you, many dealerships offer loans as well.
Taking on a loan can be an intimidating process, but it doesn't have to be. Even without a credit history, a little planning can help you secure a car loan.
