How to Get a Car Loan Without a Co-Signer: A Guide
A car is one of the most important purchases you can make. It’s an investment in your future and should be treated as such. However, it’s also expensive to buy a car without help from someone else. That’s where co-signers come into play.
If you have someone to cosign for your loan, that will increase the likelihood of getting approved for financing by about 50%.
But what if you don’t know anyone like this? Read on to learn how to get a car loan without a co-signer.
1. Check Your Credit Score
With a good credit score, getting financing will be much easier. An excellent way to check your score is through the free service provided by myfico.com. If it’s not the best right now, make sure to clean up any errors that may appear on your report before contacting lenders for help with obtaining financing.
Auto loan shopping is a quick and easy process, but it’s important to take your time. You want the best deal possible on an auto loan. Ensure not only interest rates are reasonable, but also consider checking out terms as well as fees involved with financing.
2. Save For the Down Payment
Most lenders ask for a down payment. The down payment can range from about two to twenty percent of the purchase price of the vehicle you’re buying.
If you don’t have this type of money saved up already, then it’s time to start saving as much as possible before going out and looking at cars with your lender.
3. Keep Track of Your Expenses
Once you start looking at cars, make sure to keep track of your expenses. Keeping good records will help in the long run if anything goes wrong with your vehicle when it comes time for a trade-in or reselling.
If you don’t keep detailed logs on how much money is going out and what’s coming in, then all that could be left is a bad credit score and no way to pay off your car loan.
4. Be Well-versed with Loan Requirements Terms Without A Co-Signer
Before you go out car shopping, it’s important to know what type of loan you need. In most cases, this will be an auto financing contract with either a bank or credit union, as well as the dealer from which you choose your vehicle.
According to Lantern by SoFi, “It is advised to have sufficient knowledge about various terms and conditions associated with car loans without a co-signer.”
5. Be Candid About Your Financial Capabilities with Your Lender
Once you’ve chosen the car that’s right for you, it’s time to move on to setting up financing.
However, before contacting your lender, make sure you sit down and think about how much money can be put toward your loan each month and what kind of monthly payments are affordable. If lenders find out later that this information was not disclosed, they may assume you were hiding something.
Conclusively, getting a car loan without a co-signer is possible, but it requires some work. The above tips should help you get on the right track to becoming a new car owner with little or no hassle at all.