Car Loans for People With Good Jobs But Limited Credit History

Unless you purchase a used car cheaply from a private owner, you probably are going to have to take out a loan to pay for your vehicle. If you don't have any credit history, you may run into trouble. You can still get a loan using a co-signer or by putting more money down. As long as you have steady income and have worked for at least 18 months, most lenders will consider your application.

No-credit Loans

You may need to get a loan for people with no credit. Usually, to qualify for this type of loan, you must have 18 months of stable work history and the ability to offer a down payment. Some lenders require large down payments from people who have no credit, while other lenders will accept a smaller down payment, but charge higher interest to people who do not currently have enough credit history to qualify for regular loans.

Co-signed Loans

Many auto lenders accept cosigners on loans for people with poor or no credit. If someone with good credit is willing to co-sign your loan, you may be able to qualify for better interest rates or lower down payments. Keep in mind that legally, your co-signer is equally responsible for the loan, so you must make all payments on time to avoid damage to both of your credit histories. Do not use a co-signer if you don't think you can make payments on time.

First Time Loans

If you have no credit whatsoever, lenders may be willing to take a risk if you are making enough income to cover your monthly payments. In general, you can borrow up to 15 percent of your income and still qualify for loans. For example, if your pre-tax income is $3,000 per month, you can qualify for loans of up to $450 per month. You may not need a co-signer if you have a stable source of income and enough income to cover the monthly payments.

Improving Credit

If your lack of credit history is interfering with your ability to secure a vehicle loan, you may want to strengthen your credit history and try again. Opening a bank account or getting a credit card in your name can help build your credit history. Make all payments on time to keep your credit history positive. After six months to a year, you may qualify for loans due to your greater credit history.