If you’re looking into car loans for first-time buyers then you’ve likely got questions about the financing process. How easy is it to get a loan for your first car? Can you get a loan with no credit history? What are the options?
Don’t worry, lenders like RoadLoans make it their business to accept applications from people starting out like this. Our process is quick, simple and, if approved, you can even shop and drive the same day.
Here are some tips to help as you go forward.
Tips for first-time buyers needing an auto loan
Consider establishing a credit history
If there’s little or nothing on your credit reports, one option is to build up a history of good credit habits before you apply. This will help your credit score, which is typically one of the main criteria used to determine whether you’ll get approved and, if so, what interest rate and other terms you’re offered.
The Consumer Financial Protection Bureau (CFPB) outlines several ways to establish a credit history, including taking out a secured credit card, getting a store card, becoming an authorized user on the credit card account of someone else, such as a family member, and cosigning or becoming a joint applicant on a card.
Find a suitable lender to apply now
Not everyone has time to build credit and, if you need a loan to buy a car now, you can still apply for financing. Look for a lender that accepts applications from first-time car buyers and people with no or bad credit* histories.
Work out what you can afford
Empower yourself to make smart decisions by estimating what you could comfortably afford to spend on a vehicle. Online auto finance calculators make it easy to see what a potential loan amount and monthly payment will be.
A down payment may be needed
In some cases there will be a minimum down payment requirement on a car loan for a first-time buyer. Money down shows the lender the applicant is committed to the deal. It will also reduce the loan amount and may save you money in interest charges over the life of the loan.
Apply with a co-applicant or cosigner
Either of these options will typically improve the chances of approval and, if approved, the terms offered. Adding a co-applicant means you’re applying for a joint auto loan in which each party has equal rights to the vehicle and responsibility for the loan. A cosigner is someone who agrees to make any missed payments or repay the loan in full if needed, but has no rights to the vehicle.
Getting preapproved for an auto loan enables you to arrange financing at your leisure, compare any offers you receive and go with the best option for your situation. You’ll also know exactly what you can spend on a vehicle before you shop for it, so you can concentrate on choosing the right car for the right price rather than having to think about financing, too.
Let’s say you’re approved for a car loan and purchase a great vehicle. Making timely payments on that loan will help to build or rebuild your credit, as long as the lender reports your payments to a major credit bureau, which will stand you in good stead when you need to finance another car.
The benefits of car loans for first-time buyers with RoadLoans
We make the process of buying a first car easy:
- All credit types accepted
- Fast online application
- Instant decisions
- Apply with a co-applicant
- Multiple loan offers for approved applicants
- Loan terms up to 72 months
- Preapproval lets customers shop with confidence
As the online lending platform of national auto lender Santander Consumer USA, RoadLoans has years of experience helping consumers across the credit spectrum get behind the wheel with financing that works for them. It takes just a few minutes to complete our one-page application and, if approved, you’ll enjoy a seamless, no-hassle car-buying experience. Just select the loan offer that best suits you, download your loan packet and visit the preferred dealer listed inside. We work with 14,000 trusted dealerships across the country able to show you select cars, trucks and SUVs.
Apply for a car loan and get an instant decision.
* “Bad” or “Poor” credit generally is considered a FICO score around 600 and below by sources including the Consumer Federation of America and National Credit Reporting Association (reported by the Associated Press), Bankrate.com, Credit.com, Investopedia, NerdWallet.com and others. The Congressional Budget Office identifies a FICO score of 620 as the “cutoff” for prime loans. FICO scores are not the sole factor in lending decisions by RoadLoans.com and Santander Consumer USA.