College is an exciting time—you’re out on your own for the first time and exploring the freedom that comes with being an adult. One thing many college students want to do is buy their own vehicle. For these, the discovery that getting a loan is tough can come as a shock. While you may not have bad credit, having no credit can create some of the same problems when it comes to getting a car loan. There’s good news, however. There do exist loans specifically for those who don’t have any credit at all. Here’s a look at how no-credit car loans can help students get behind the wheel of their first car.
No-Credit Car Loans
Most people who don’t have any credit at all are students just entering college or just turning 18 years old. For such young adults, getting a car may be either convenient or even a necessity if you have to commute to and from campus. It can be shocking, however, to discover that without an existing credit score it can be tough to get credit. It seems like a catch-22.
Fortunately, there are auto loan companies out there who specialize in offering loans specifically to no-credit borrowers. If you have no history of credit and are looking to buy your first car, you can research many of these no-credit car loans options to get behind the wheel.
The Key to Credit
Getting a no-credit car loan can help you build credit that you’ll need later on. After all, having credit is the key to building credit. There are many approaches to getting that first car loan, but getting pre-approved is generally a good first step. If you have a relationship with your bank or a credit union, you can approach them about young borrower programs they might have. Failing that, you can approach a company that specializes in no-credit lending.
What You’ll Need
You will need, at very least, to be able to show that you have regular income and can make the payments on your loan. It may be a good idea to check out a loan calculator online to find out how much you’ll spend on your loan and budget how much you can afford. By not asking for too much, you’ll show responsibility and the lender will view you as a better risk.
Understand that you will likely have a higher interest rate than those with strong credit, and you probably should go for a lower-end vehicle that you can afford. You have plenty of time to invest in your dream car down the road after you build more credit. For now, go with a vehicle that’s going to be reliable and get you where you need to go, when you need to get there.
If you’re looking to get into your first vehicle but are concerned about having no credit, we can help. Take a look at our lending programs and get in touch with us to get pre-approved for an auto loan today!