Financing for first-time car buyers with no credit

Man and woman first-time car buyers sitting on tailgate


  • You can still apply for a loan without an established credit history

  • Down payment, co-applicant among ways to boost your application

  • RoadLoans offers a quick and easy process for newcomers to financing


As a first-time car buyer with no credit or bad credit,* you might feel up against it.

That’s understandable. Consumers with long and strong credit histories generally stand a better chance of getting financing from an auto lender, and may enjoy better terms and a greater choice of vehicles.

But take heart. Many lenders are set up to work with first-time buyers, and guess what? Many of those consumers have limited or bad credit histories. Furthermore, there are a number of steps that may be taken to make the whole process easier. Let’s explore them.


7 tips for securing your first auto loan

1. Make a down payment
Money talks, and a down payment offers two significant advantages. Firstly, it will improve the likelihood of an approval. Secondly, it can reduce your loan amount so that you may qualify for a lower interest rate, pay less interest overall and get smaller monthly payments.

2. Budget for your loan
Down payment or no down payment, consider budgeting the cost of a loan so you know what you can afford to pay back. Use RoadLoans’ online calculators to estimate what you may be able to spend on a car in total and as a monthly payment. Adjust the values, including any money down, to see how affordability changes.

3. Get a co-applicant or cosigner
Compensate for your lack of credit history by joining forces with someone who is already a creditworthy borrower, such as a parent, spouse or close friend. One option is a co-applicant, who becomes a co-borrower with equal obligations on the note and access to the vehicle. Another is a cosigner, who guarantees repayment of your loan if you can’t meet the payments yourself, but has no rights to the vehicle.

4. Get preapproved
Take the initiative and get approved for a loan before you visit the dealership. If preapproved, you can approach your first car purchase with greater confidence, already knowing the terms of your loan approval. You can also focus on choosing the right car and negotiating its price, instead of having to think financing, too.

5. Apply with a full-spectrum lender
In addition to seeking preapproval, apply with a lender that works with consumers across the credit spectrum, such as RoadLoans. These lenders are able to offer you a great chance of getting approved and have helped countless customers with little to no credit buy the vehicle they need.

6. Build credit first
You could start to build credit before you apply. The Consumer Financial Protection Bureau recommends a number of ways to do this, which include getting a store card or secured credit card, or being added as an authorized user on a credit card. Once you have access to credit, habits like making payments on time, not getting too close to your credit limit (keep within 30 percent on your total limit), and only applying for credit you need will help get and keep a good score.

7. Build credit as you go
If you need a car right now, then getting approved for an auto loan and keeping up with your monthly payments will help you establish a positive credit history. Besides having your own means of transportation, you’ll be better placed to qualify for new credit in future.


Get your loan decision in minutes

Just because you’re a newcomer to financing doesn’t mean you have to go through a lengthy loan process. RoadLoans makes it easy, starting with a short online application and instant decisions. It takes just a few minutes to enter your contact details, address, Social Security number and income, and click apply. You also have the option to add a co-applicant.

If approved, we provide multiple offers so you can select the best fit, print your loan documents and go shop for your wheels. You’ll notice a preferred dealership, located nearby, listed in your loan documents. Alternatively, use our dealer locator to find another. We work with 15,000 auto dealers across the country that are able to show you select models meeting our high standards, so you can feel even better about buying your first car.

Apply for a car loan online.


* “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),,, Investopedia, 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 and Santander Consumer USA.


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