You’re ready to get an auto loan, but you’re nervous that you don’t have the credit background to support your application. What’s next?

As a first-time buyer, you can still qualify for a no credit auto loan, but you have to do your due diligence to ensure that you prepare yourself to complete this process.

You can use these five tips to help you when getting an auto loan with no credit as a first-time buyer.

1. Have a consistent job

One of the best ways to qualify for an auto loan as a first-time buyer is to have consistent income from your job. Your lender’s primary concern is whether you can repay the loan according to the agreed-upon terms.

Before you start applying, make sure that you have a reliable source of income, and if you have any gaps in your work history, be ready to explain what took place during those times.

2. Save for a downpayment

Some lenders will require that you make a downpayment when you get a no credit auto loan since you don’t have the history to prove your creditworthiness or your ability to make on-time payments.

While it might seem like a hassle, making a downpayment can be a benefit to you because it means you’re lowering the amount you have to borrow. In doing so, you reduce your monthly payment, how much you pay in interest, and how much you owe on the vehicle compared to its value.

This is helpful because it decreases the likelihood that you’ll go upside down on your loan, which is when you wind up owing more than your vehicle is worth.

Some lenders do offer 100% financing so you don’t have to worry about saving money for a downpayment. That’s one of the benefits of getting an auto loan with Fort Lee Federal Credit Union.

Even if a downpayment isn’t required, it’s still a good idea to make one because it is a show of commitment toward purchasing a vehicle.

The average vehicle downpayment ranges between 9-12% of the cost of the vehicle, according to Kelley Blue Book. However, since you don’t have credit, you might want to have more saved just in case.

3. Get a cosigner

Another tip for securing an auto loan as a first-time buyer is to get a cosigner. A cosigner is someone who signs a promissory note for your auto loan, which gives them an equal liability to the debt. Essentially, you use the credit of your cosigner to help you qualify for the loan or secure better terms.

It’s important to note that your cosigner assumes the financial risk if you fail to make payments as agreed upon. So your actions or inactions will impact their credit. That’s why you want to be sure you can afford your vehicle payments and make them on time before bringing on a cosigner.

4. Build your credit

If you can wait before purchasing your vehicle, it’s a good idea for you to take some time to establish and build your credit.

The more you can show your history of having credit and making on-time payments, the easier it will be to qualify for an auto loan as a first-time buyer.

You can apply for a loan or credit card and use it to your advantage. Make your loan payments on time each month. Only charge small amounts to your credit card and pay your card off in full with every payment. Once you have a history of making on-time payments, it’s the start of establishing your credit.

Another option is to become an authorized user on someone’s credit card. When this happens, their credit activity will show on your credit report as well. As long as the primary user is exercising good financial practices by keeping the balance low and making payments on time, it will help you build a good credit history.

5. Choose a flexible lender

While following all of the tips listed above are helpful, the lender you choose will have one of the most significant impacts on your car loan application.

You want to work with a flexible lender that doesn’t consider you being a first-time buyer a hindrance, but instead views it as an opportunity to help you through a major financial step in your life.

Credit unions are known for looking at the person and the story behind each applicant to see how they can help them without letting what’s in black and white on the paperwork dictate the entire process.

Also, if you select a credit union that you already have an account history with, they will be able to review your account history to help them decide on your loan. Having a prior relationship also makes them more likely to approve a vehicle loan.

Get Your Auto Loan With No Credit

Being a first-time buyer shouldn’t hold you back from getting an auto loan. Everyone has to start somewhere. Instead of using your lack of credit as a barrier, you want to work with a lender that will support you through this process.

At Fort Lee Federal Credit Union, we welcome you to join our members who we have helped successfully navigate the auto loan process as first-time buyers.

We have a team of auto loan officers prepared to support you every step of the way.

With terms up to 84 months* and 100% financing, we want to make your first vehicle purchase as easy and affordable as possible.

*New or Used Vehicle Loans: 2.74% APR is applicable on New or Used Vehicles for terms up to 60 months. Terms up to 84 months available depending on model, mileage, and amount borrowed. Credit qualifications apply. The rate you receive is determined by credit qualifications. Ask a loan officer for more information. A loan example: $25,000 financed at 2.74% APR for 60 months gives a monthly payment of $447. Additional loan example: $25,000 financed for 84 months at 4.24% APR would make the monthly payment $344.58.