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Is it Possible to Get a Car Loan with No Credit?

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Is it Possible to Get a Car Loan with No Credit?

Having bad or no credit can come back to haunt us, as credit scores seem to dictate many of our financial decisions such as buying a house, buying a new car, or even getting a credit card. Building your credit up from nothing can be a significant hurdle to overcome, so we at Summerside Toyota want to show you our strategy on how to get a car loan with no credit so you can build credit and get a new vehicle.

The first step is to start saving. Build up enough savings that you can comfortably have a large down payment to put on a new vehicle. The larger your down payment, the more likely a lender is to give you a loan, and the smaller your monthly payments will be. Putting a large down payment on a new vehicle is a great way of showing dealerships that you’re serious about building your credit score and getting that new car loan.

What do I need to get approved for a car loan?

Once you’ve got that down payment for a new car all saved up, the next step is to get pre-approved for a car loan. It’ll be a lot less intimidating if you come prepared, and you’ll also learn a lot more. You’ll need to take with you three documents to prove that you’re financially responsible and able to afford the monthly car loan payments. The first document should be a bank statement, to show your financial history. From there you’ll need something that demonstrates your ability to pay bills on time (like a phone or utilities bill) and proof of employment such as a recent pay stub. You’ll need to have all these documents with you to get pre-approved for a car loan and ultimately start establishing your credit.

Get a co-signer

We know, it sucks to have to ask Mom and Dad for a favour once you’re out on your own, but sometimes you need a co-signer to help you get that car loan and start building your credit. A co-signer is someone who is financially responsible and has good credit of their own who can help you take on the responsibility of a loan. Essentially, if you can’t make a payment, the responsibility for the loan falls on them, so choose your co-signer wisely and always ensure you can make your monthly payments.

In short, save up for a large down payment, have all the necessary documentation, and find a responsible co-signer and you will be ready to get pre-approved for a car loan to start building up that credit score. Follow these tips and you’ll be driving around in your new car from Summerside Toyota in no time.

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