How to Get Car Loans for Bad Credit and No Co-Signer

Getting a car loan even if you have bad credit can ultimately help improve your credit score. Paying a car loan each month adds favorable information to your credit report because lenders report your timely payments. Because the vehicle secures the auto loan, you can qualify for financing with bad credit and no co-signer. Knowing where to look is key to getting your loan approved.

Instructions

1

Buy from a dealer that offers sub-prime loans. Call different dealerships in your area and ask to speak with a finance manager. Explain your situation and ask whether the dealership offers loans to people with a low credit score. Privately owned dealerships that offer in-house financing typically work with bad-credit applicants.

2

Set aside money for a down payment to increase your negotiating power. A down payment can help you obtain a better interest rate on your car loan. Aim for a down payment of about 20 percent of the purchase price.

3

Bring pay stubs to confirm employment and income. You won't qualify for a car loan without steady employment and evidence of income. Auto lenders will request tangible proof of income, and they might contact your employer to verify the accuracy of financial information.

4

Prepare to pay a higher interest rate on the vehicle loan due to your low credit score. People with credit problems customarily pay higher interest rates on auto loans. Keep your rate to a minimum by shopping around and requesting free loan quotes before purchasing your car. Auto lenders provide quotes after reviewing your credit score and history.