Can You Get a Car Loan in Ohio Without a Co-signer if You Are 20 Years Old?

Getting a car loan in Ohio as a 20-year-old is similar to getting a loan in any other state. While many 20-year-olds use a co-signer to get a vehicle loan, it is possible to secure your own financing without the need for a co-signer. There is nothing unique to Ohio about the process. Not using a co-signer may result in a higher interest rate, depending on your credit rating.

Do You Have a Job?

To qualify for an auto loan in Ohio, you need to show proof of income. Usually this means a full-time job. Being a full-time or part-time student does not exempt you from this requirement. In Ohio, as in other states, you must be able to show that you have the resources to pay on the loan. By not having a co-signer, the income responsibility falls on your shoulder. For the best results, you should have a full-time job in Ohio to get the loan.

How Is Your Credit History?

At 20 years old, you may not even have established a credit history yet. In many cases, not having a credit history is as bad as having terrible credit. This is because you cannot show proof of paying your debts on time and being responsible with your debt payments. If you have already established a credit history, it is important that you have good or excellent credit. While it is not impossible to get a car loan in Ohio with bad credit, you will usually pay a higher interest rate on the loan. You can enter in your Ohio zip code on the Bankrate website to get an idea of the current interest rate in your area and the type of credit rating you need to qualify for that rate. It will show you local lenders instead of car dealer financing.

Do You Have Money for a Down Payment?

It can be easier to get an auto loan when you have a down payment for the vehicle. Typically, the larger your down payment, the easier it is to qualify for financing. This is true in Ohio and all other states. The reason is that it establishes immediate equity, which is seen as less of a risk for the lending institution. A larger down payment can also result in a lower interest rate on your car loan. Bankrate recommends putting down 20 percent of the purchase price, if you can afford it.

How to Apply

When you have found a car that you want to buy, you usually have more than one option for financing. If you are buying a new or used car in Ohio from a local car dealer or car lot, you can get financing through the dealer. Or you can apply at a local credit union or bank. If you are buying from an individual, you will have to use a bank or credit union. You may get a better rate at the financial institution where you do your banking. Some of the banks with a presence throughout Ohio include Chase Bank, Bank of America, US Bank and Fifth Third Bank. To apply for the loan, you will need your Ohio driver's license and your most recent paycheck stub.