Can I Get a Car Loan with No Credit Check?

A young couple buying a new car
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Here’s something you might not know. It is possible to get a car loan with no credit check. The experience of shopping for a new car is different for every person. Some people absolutely love it. They look forward to checking out all the models, colors, and options. They love the test drives. They even love negotiating the deal. Others find the whole thing a painful, anxiety-raising process that they would just as soon avoid entirely.

 For most people, however, it’s a mixed bag. They enjoy some parts of the process while other parts, not so much. One part that no one seems to enjoy is being scrutinized for a car loan. This is especially true for those folks with bad credit.

Technically…

OK, I may have lied. Sort of. In reality, you probably can’t get a car loan without your credit being checked. What I should have said, to be more precise, is that if you have bad credit (or even really bad credit or no credit), some lenders will ignore your scores and offer you a loan anyway. That doesn’t mean there won’t be some requirements, however.

What you will need to get a car loan.

Having bad credit or no credit doesn’t mean a lender will give you a loan without some proof that you are good for paying it back. It simply means that they are willing to take a chance on you based on information other than your credit scores. That information will almost certainly include proof of steady employment.

 Be prepared to show your potential lender pay stubs from your work going back as far as you can. The longer you have been employed at your present job, the better. How much you are earning will also matter. Again, the more the better, but figure on a minimum income of at least $1,000 a month.

You will also likely be required to make a down payment.

 Its size will vary according to several factors including the specific lender, the particular car you are purchasing, and your employment situation. A larger down payment is always better for you, though. The lender is more likely to approve a loan for a smaller amount on a deal that comes with more equity up-front. Further, a larger down payment indicates your seriousness regarding the loan process.

Other ways to prove your reliability.

Any and all evidence that you are a reliable borrower will help your cause. If you have taken out previous loans for other items (furniture, other vehicles, etc.) and paid them back in a timely manner, gather up the papers that prove it and bring them along. Also, bring along your recent utility bills (ones that are in your name) to show that you have consistently paid them on time. And if you happen to possess any other assets of value, bring proof of ownership with you. They might be taken in as collateral or at least be considered more proof that you can be relied upon to pay back your loan. 

Bring a cosigner.

I know that having a cosigner is not an option for many. Nevertheless, if you can get someone to cosign, you have a much better chance of securing your loan.

 Remember, though, that if you fail to make your payments, the burden will fall on your cosigner. So make sure that you respect the loan process and make your payments on time. If not, you risk not only losing your car but also an important personal relationship.

And finally…

Don’t be afraid to shop around. Start with your bank if you have a checking or savings account. Also, check with your insurer. Often both are also in the business of making car loans and may be willing to give you better terms than an auto dealer will. And don’t be afraid to negotiate. Let’s face it, you are not the perfect borrower and will likely have to pay a high interest rate. But keep in mind that lenders make loans for a living and want your business. Don’t necessarily take the first loan offer your lender makes.

 It never hurts to ask for a lower rate or better terms.

There is no doubt that shopping for a car loan with bad or no credit can be difficult and embarrassing. If it helps, remember that you are not alone. It is estimated that 25% or more of individuals seeking auto loans have poor or no credit. Yet loans are being made to them every day.  Just make sure that you do some research and be as prepared as possible. Then go out there and get your car loan.