Usually the first large purchase someone makes that requires the use of financing or a loan is for a car of their own. The challenge with this is that you may not have the proper credit history in order to qualify for a loan or to have a creditor approve them for a loan. Therefore, applying for an auto loan with no credit can come with its fair share of difficulties. There are options however. Here are a few of the reasons why a creditor may not approve someone for a car loan, why establishing credit can be difficult and options that are available to people with little or no credit history when applying for a car loan.
One of the primary reasons that a bank or traditional credit union will not approve a low interest car loan for someone with little to no credit is that they have no guarantee that the customer will be able to pay them back the money that has been loaned. Someone with a proven history of good credit and evidence that they have been able to pay back a number of loans and credit payments without incident is a much better indication that the bank or credit agency will see a return on the loan. Quite often a bank or major credit agency will be trained to minimize losses whenever possible and even if you can provide evidence that the loan will be paid off through your income they will not take the chance if you have little to no credit history in order to back it up.
Actually establishing a good credit report can take months if not years. Qualifying for a credit card if you have no prior credit history can be equally as difficult. You may want to sign up for a store credit card or a secured credit card in order to begin establishing a credit history. Only after having bought several items through your line of credit and paying off the balance, as well as holding the line of credit in good standing over time will you establish a proper credit report. If you need a car quickly, taking the time to establish proper credit could be completely out of your means.
There are options for people with little or no credit history. Several companies are able to offer easy online application forms that can be approved in a matter of seconds. The loans through these lenders are more apt to be approved regardless of your credit history provided you can provide a statement proving your income and employment status. Filling out the form is quite easy and it is possible to be approved for the loan in a matter of minutes giving you access to the credit that you need.
Even if you do not have an extensive credit history or if this is your first loan, there is no need to worry about being declined using an online lender for car financing. Getting the money you need can be done without hassle and without having to face any rejection because of your lack of credit history.