Yes, lenders have auto loans for people with no credit, but getting one is not guaranteed. It will depend on the lenderâs flexibility, the down payment you can afford, and the kind of car you want to buy. It may even depend on how you ask.
Phil Reed, senior consumer advice editor for the consumer auto site Edmunds has some good advice on how to get a car loan with no credit. He says a surprising number of people simply walk into a dealership and say, âHi, I have no credit, and I want to buy a car.â He doesnât recommend this approach. Instead, he offers these five tips for people who need a no-credit car loan.
1. Get Pre-Approved
If you have no credit or a thin credit profile, you should try to get preapproved for a loan before heading to the dealership. This will let you compare rates with any loan the dealer may offer. It may also give you a bargaining chip when negotiating the final deal.
If you have a relationship with a bank or credit union, you should start looking for financing there. Reed recommends making an appointment to meet with your bankâs loan officer in person.
âMake a case for yourself,â he says. That means bringing your pay stubs and bank account records with you. You should also check your credit reports, if they exist, and credit scores. You want to know as much about your credit profile as a lender would. If you donât know your credit score, donât worryâyou can check your credit score for free every month on Credit.com.
If you canât get a loan from your financial institution, you may be able to find a no-credit auto loan online. Just make sure itâs from a reputable lender. Credit.com can also help you find auto loan offers from trustworthy lending institutions.
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2. Negotiate a Good Price
A dealership could beat the offer you get from your bank or credit union. However, if you know youâre already approved for a loan, you can focus on comparing rates and prices instead of worrying about financing.
Reed says that itâs important to be wary. You donât want to feel so indebted to the dealer for âgivingâ you a loan that you fail to negotiate the price of the car. And if the dealerâs financing isnât better than the bankâs, at least you still have an approval in your pocket.
Having a good down payment or trade-in can also help your case. A trade-in would reduce the amount youâll need to borrow, and a larger down payment would show the lender some commitment on your part. Edmunds recommends putting at least 10% down on a used car, so start saving now.
3. Choose the Right Car
Be sure the car youâre buying is affordable for you, even if itâs not the car youâd choose if you had more money and better credit. âIf you have no credit, itâs not the time to get your dream car,â Reed says. âYou have to choose the right car and the right amount [to borrow].â
You want reliable transportation you can afford. Making regular, on-time payments wonât just pay down your load, it will also build your credit, so donât get a loan that requires higher payments than you can comfortably make.
Sites like Kelley Blue Book, Cars.com, and Edmunds can help you find information on the cars that match your budget. When youâre at the car dealership, remember your budget and donât spring for optional add-ons you donât really need.
4. Donât Let Interest Rates Scare You Off
Reed cautions that when you get a loan with no credit, the interest rates youâre offered may seem appallingly high, but thatâs part of the cost of having no credit history.
When you donât have a credit score, lenders canât assess how big of a risk theyâre taking by giving you a loan. To protect the money theyâre lending, they will likely treat you as a high-risk borrower, which means the loan will have a higher interest rate.
As you make payments, youâll establish a pattern of reliably paying back money. Over time, you can improve your interest rate by refinancing. Reed says that, according to a dealership employee, a customer once lowered his interest rate from 13% to 2% in two yearsâ time by improving his credit and refinancing.
5. Give Yourself Some Credit, Not a Cosigner
Reed advises against cosigningâa process that involves checking someone elseâs credit and using that score to qualify for a loan. It might get you a lower rate and help you get approved, but Reed says that if you bite the bullet and pay a higher interest rate rather than get a cosigner, youâll have the opportunity to build credit.
In addition, having a cosigner will tie that personâs credit to yours, and the way you repay your car loan will influence their credit. Reed says if youâre going to do it, do it only as a last resort, and make sure the cosigner is a relative.
Bottom line, though, as Reed explains, âItâs asking a lot.â Itâs better to finance the car yourself, pay on time, and build your credit. That way, the next time you need a loan, you wonât have to worry about whether youâll qualify.
Good credit doesnât just help you get reliable transportation: good credit can make a huge difference in improving your financial security and the peace of mind that comes with it. Start tracking your credit for free today at Credit.com. Your new car will get you moving around town, but your new credit score will get you moving up in the world.
The landlord-tenant relationship can be a difficult one to navigate, especially if it involves a lot of renter complaints.
But that doesn’t mean it’s impossible to build a strong foundation with your landlord. Both parties have a lot at stake.
For you, it’s your home and your security deposit, and for your landlord, it’s their income and the property in which they have invested time and money. It’s not uncommon for tension to arise at some point, but how you handle difficult situations can make or break the relationship with your landlord moving forward.
The best initial step you can take to avoid a less-than-stellar landlord is to include an assessment of your potential landlord as part of the decision process when searching for a new place to live. Have they been easy to contact so far? Have they answered your questions and addressed your concerns? Do some background research and see if you can find any reviews from past tenants.
If you do find yourself experiencing one of these common renter complaints, there are steps you can take to try and resolve the situation.
Common renter complaint #1: Poor communication
Many renters deal with a lack of communication from their landlords and feel that they’re unaware of certain rules or expectations as they relate to the property. Maybe you sign your lease agreement, move into your new home and never really hear from your landlord again. Or, maybe you’re having trouble with your landlord’s responsiveness to issues like maintenance requests, noisy neighbors or other important questions.
Early on in the relationship with your landlord, ask if they can walk through the lease agreement with you and point out any rules or expectations that are especially important to them (something a good landlord should do on their own.) As a tenant, it’s your responsibility to read through the lease agreement in its entirety and bring up any questions you may have.
Do your best to keep lines of communication open with your landlord â make timely contact about any issues or questions that arise and don’t be afraid to ask for help. If your landlord lives in the same building or is frequently on the property, be sure to be friendly and say hello when you cross paths. Establishing this relationship from the get-go will build trust.
Common renter complaint #2: Maintenance issues
Maintenance issues and repairs are one of the main reasons you’ll have to get in touch with your landlord throughout your rental experience. Whether it’s something minor like a lighting fixture fix or something major like a water leak, your landlord should be responding and repairing your requests in a timely manner.
Establish your landlord’s preferred method of communication from the get-go. Can you text them a picture of the issue to make sure it’s catching their attention and not getting lost in an email inbox? Are they not as tech-savvy and prefer you give them a call directly? If you don’t already have a tenant portal, ask your landlord if they would consider setting one up so you can easily submit maintenance requests and your landlord can easily track everything in one place.
Be clear on what your responsibility is as a renter and what your landlord’s responsibility is. Make sure to check in on your local laws to figure out what the expectations are on important maintenance issues like water, heating or other habitability issues.
Common renter complaint #3: Lack of privacy
Sometimes, a landlord might be on the property without actually entering your home. He might comment on whether or not your front porch had been cleared of leaves or whether or not the recycling bin was too full, and it always felt like an invasion of privacy to have him pop up unannounced.
As a tenant, you absolutely have a legal right to the quiet enjoyment of your home and your landlord is required to provide you with at least 24 hours notice before entering your property (unless there’s an emergency situation). If your landlord is showing up for maintenance or inspections without notifying you first, bring it to their attention right away.
If your landlord performs regular inspections, ask if they would be willing to come on the same day every month or give you a schedule for the entirety of your lease agreement. If language around routine inspections isn’t included in your lease agreement, be sure to ask about it before you sign.
Common renter complaint #4: Security deposit refunds
It’s always upsetting to move out of a property and learn that your security deposit refund is much smaller than you were expecting â especially if you followed all move-out instructions and didn’t cause any major damage.
It’s important to understand that typically, landlords are not profiting off of your security deposit â they’re using the finances to repair an issue that occurred when you were the renter. Of course, there are situations where this isn’t the case and legal action is the only feasible option.
Before you move out, ask your landlord to provide you with a move-out checklist or clearly state their expectations. Refer to any checklists or inspection documents that you may have completed upon move in to make sure you’re leaving the property in the same condition you found it.
Ask your landlord if they would be willing to do a property walkthrough with you before you hand over the keys to address any issues that can be fixed or cleaned before you leave. Take pictures upon move out so you have evidence to show your landlord if need be.
If you are charged or your landlord withholds your security deposit, ask for an itemized list of the deductions so you can clearly see where your money is going.
Keep it friendly
Establishing a positive relationship with your landlord from the beginning and keeping lines of communication open will make it easier for both parties to deal with any issues that arise down the road.
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