Posted on Nov 17, 2011 by Albano Stefani
Nov
17
At some point, most young people need reliable transportation to get to and from their jobs. Cars are expensive, and it is a rare individual who has thousands of dollars saved to buy an automobile. It is frustrating to be turned down for auto loans due to having no credit. Credit history has to start someplace, but where is that magical place? There is such a thing as a no credit auto loan, and it is possible to qualify for one by following a few basic rules.
Income
Proof of a steady income is imperative when applying for a no credit auto loan. There must be sufficient income to make the car payments, afford necessary repairs and pay for full coverage insurance. Full coverage insurance is always required when a car in financed. The lender needs the assurance that the loan will be paid off if the car is totaled in an accident.
Down Payment
The larger the down payment, the better the chances of qualifying for a loan. A large down payment reduces the amount of money to be finance. This means that monthly payments will be smaller, or the length of the loan will be shorter. The lender also likes to see that the new owner has a substantial investment in the car. An owner who has invested his own money is less likely to default on the loan.
Cosigner
Have a cosigner lined up just in case one is needed to secure a no credit auto loan. The person who cosigns on the loan is guaranteeing payment should the new owner. This lessens the risk the lender is taking on loaning money to a person with no known repayment history. The person guaranteeing the loan must have decent credit. This credit worthy person is usually a relative of the borrower.