Want to
drive a new car??
PAYLESS
then people with
PERFECT CREDIT
No
Credit Auto
Loans
No credit auto loans or first
time buyer auto loans are a bit
tricky to get approved for. There
are several keys factors lenders
look at to determine whether or
not they will loan you money.
There are lenders that exist
that will approve just about
anyone, but their terms are
typically not good for the
consumer. These lenders are
usually looking for big down
payments and short finance terms
with high interest rates. The
following list is to show what
better lenders, i.e. credit
unions, your local bank, etc.
will be looking at to, hopefully,
get you a better approval with
more favorable terms and interest
rates.
1)
Do you have employment
stability?
The more job stability the
better. Most lenders are going to
want to see at least 18 months
work history with your current
employer. This does not bode well
for those of you that are right
out of high school and have been
working at the local pizza place
for three months.
2)
How big a down payment do you
have?
Lenders like big down
payments. Big down payments mean
less risk for the lender and
therefore, lenders will sometimes
make exceptions or offer better
terms and interest rates. A
typical down payment is going to
be $1,000 or 10% of the purchase
price, but they really like to
see a larger commitment, more
like $2,500 or 25%.
3)
How much are you looking to
borrow?
Most first time buyers I see,
due to their inexperience, shop
for vehicles that are way out of
their league. Even though you may
be okay with a $600 a month
payment, the lender is not. They
will usually want your monthly
payments to be 15% or less of
your gross monthly income. If you
make $2,000 a month, the max
payment they are going to want
you to have is $300.
Lenders will also, typically,
only lend $8,000 to $12,000 for a
first time buyer, so you may need
to adjust your thinking down a
little bit.
4)
Do you have any negative accounts
on your credit
file?
You may never have applied for
credit, but you may still have
collection accounts reporting to
your credit file. This is most
common with utility companies,
medical collections, judgements
and tax liens. If you have any of
these and no positive credit, you
will have to get these completely
removed from your credit file (if
possible) before any of the
better lenders will even come
close to considering your
application.
This is by far the biggest
killer and most customers end up
having no option but to finance
through the undesirable
lenders.
5)
Do you have a qualified
cosigner?
You probably wouldn't be
reading this article if you did,
but a qualified cosigner can help
immensely. A strong cosigner can
help to slash your interest
rates, give you a no money down
option with better terms and
allow you to buy more vehicle. If
you have a qualified cosigner
available, this will certainly
help your situation
tremendously.
To sum this up, it is possible
to get approved for a no credit
auto loan, the question is what
type of approval and with what
type of lender. Obviously, the
more positives you have from
above the better your approvals
term and interest rate will
be.
Justin is a Car Buying, Bad
Credit Repair and Auto Loan
Finance authority. He is the
creator of
http://www.InsiderCarBuyingTips.com
In addition to offering the most
informative car buying tips on
the Internet, he offers the least
expensive A-(excellent) AM Best
rated
[http://InsiderCarBuyingTips.com/auto_warranty]Extended
Auto Warranties on the Internet
and has partnered with the #1
auto loan refinance source.
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