Download Article

Download Article

When you plow eighteen, transportation suddenly becomes much more of import than it e'er has been. Going to piece of work or higher requires a dependable ready of wheels. However, the vast majority of teens have limited credit and income, so information technology can exist hard to become a loan. Fortunately, at that place are a few methods you can try.

  1. one

    Find a cosigner with practiced credit. A cosigner agrees to make payments on the loan if you stop paying.[1] For this reason, the lender will want to run across that your cosigner has good credit. Ask family first, and then inquire friends if no family unit members volition cosign.

    • Your cosigner should bank check their credit history and credit score before you lot approach the lender. They can get a free copy of their credit history from all three credit bureaus by calling 1-877-322-8228 or visiting annualcreditreport.com.
    • They tin besides get a re-create of their credit score past using a gratis website such as Credit.com or Credit Karma.

  2. ii

    Convince the person to cosign. Some people might be happy to cosign, simply y'all might demand to convince others. Create a detailed budget that shows you tin can afford your loan payments. You lot might besides want to get a bank statement that shows yous accept saved money.

    Advertisement

  3. 3

    Hash out the risks of cosigning. There are several negatives to interim every bit a cosigner. For case, the loan volition be reported as part of your cosigner'southward credit history and will count towards their Debt-to-Income ratio (DTI). A college DTI might prevent them from getting loans in the futurity.[ii]

    • If you miss payments, that negative information will too show up on your cosigner'southward credit history.[iii]

  4. four

    Apply for preapproval. Stop into a banking company or credit union and talk to a loan officer about getting preapproved for a loan. You can also get preapproval online. Apply first without your cosigner. If you lot become rejected, yous can then have the cosigner come in and concord to sign on.[4]

    • Remember to shop effectually with several dissimilar lenders so that you can get the best deal. As you review the loan details, pay attention to more than the monthly payment. Too look at how much it will cost to pay off the loan over its entire life.[5]

  5. 5

    Brand timely payments. Someone has done yous a favor by cosigning for your loan. Now it is your turn to do them a favor past non missing a payment. Set upwards payment reminders, if necessary.

    • If you e'er retrieve you might miss a payment, contact your cosigner as soon every bit possible. Let them know what is going on and when y'all can get-go making payments over again.

    Advertisement

  1. 1

    Review your ain credit. Your credit might be adept enough to get a loan on your own. Pull copies of both your credit history and your credit score.[half dozen] People with credit scores beneath 600 sometimes get loans, merely the interest rate will be high.[vii]

  2. 2

    Search for a get-go-time buyer (FTB) plan. Many lenders have special programs for offset-fourth dimension buyers. You can stop into a depository financial institution or credit matrimony to check. More often than not, these programs accuse higher interest rates to kickoff the increased risk of lending to someone without a credit history.

  3. 3

    Save up for a deposit. Make the deposit as big as you can. Your chances of getting a loan depend on the amount you are borrowing. The less y'all plan to borrow, the greater the likelihood of obtaining a loan.[8]

    • Having a savings account will as well testify the lender that you are financially responsible.

  4. 4

    Obtain a letter from your employer. Because you lot don't have a lengthy credit history, lenders will focus on your job. You'll assistance yourself if y'all become a letter of the alphabet from your employer stating your annual salary and how secure your job is.[9]

  5. 5

    Make up one's mind how much to borrow. Create a monthly upkeep and effigy out the maximum amount yous can spend for your car. Car loans more often than not come in 3- to vi-twelvemonth terms. Once you place your maximum monthly allowance, utilize a calculator to determine how much your maximum loan should be.[x]

    • At xviii, you lot can await to pay a pretty high involvement charge per unit, since you oasis't established a lot of credit. Brand sure to include a high interest rate—over 10 percentage—in your calculations.
    • Call up to include your monthly insurance and maintenance costs too.

  6. 6

    Get preapproved for a loan. You lot can get a loan from the depository financial institution you do business with, merely you lot aren't limited to them. Store effectually by applying for loans online or by stopping into other banks or credit unions.[11]

    • If you lot're preapproved, so the approval is adept for only a certain corporeality of time.
    • Think to do all your loan shopping in a 14-24-hour interval window. Each individual credit pull will count every bit merely one pull if done within a two-week period.

  7. 7

    Compare loan offers. Don't accept the starting time loan that's offered to you. Instead, compare loans based on the following:[12]

    • Amount you lot can borrow. Dissimilar lenders might exist willing to lend different amounts.
    • Annual Pct Charge per unit (APR). This is the interest rate you will pay on the loan.
    • Term. A loan with a longer term might toll less per month, simply you may end upwards paying more than overall.

  8. 8

    Shop for a vehicle. Now that you lot have your preapproval in hand, you tin become find a car. Learn how to negotiate the best bargain ahead of time and then that you tin bulldoze an effective deal.

    • Once you lot achieve an agreement on price, the dealer volition work with your lender to consummate the purchase.[13]

    Advertisement

  1. 1

    Find programs. You might not qualify for a first-time buyer program. Don't fearfulness—you still have options. Some dealers have in-house financing programs called Buy Here Pay Here (BHPH) or Tote the Notation. You lot purchase the car from them and they brand the loan—at a very high involvement charge per unit.[14]

    • You can find dealers with these programs online. Type your location and "Buy Here Pay Hither." Wait to see what cars the dealer has for sale.

  2. 2

    Ask how they accept payment. Many dealers should accept payment through the mail. All the same, some still require that you lot bulldoze to the dealership and deliver payment in person.[xv] Figure this out alee of fourth dimension, and then you lot don't buy a car from a dealership hundreds of miles away.

  3. iii

    Check if they study to the credit bureaus. The simply style to build upward your credit is for lenders to report your loans to the three national credit reporting bureaus. Many BHPH lenders won't, then make sure to find i that is willing to report to the bureaus.[16]

  4. 4

    Become approved. The dealer will desire to approve yous for a loan first, to figure out how much motorcar you can afford. They'll need to pull your credit history, and you should provide data about your job. You'll demand a steady income to qualify.

  5. 5

    Store for used vehicles. BHPH dealers will typically simply sell you a used vehicle.[17] However, there are many solid used vehicles on the market today, so you should be able to observe something reliable.

    • Bring a friend to the dealership if you lot don't know what to expect for.
    • Most dealers have cars listed on their website. You can store online earlier stepping foot on the dealer's lot.

  6. 6

    Review your contract closely. BHPH dealers brand a lot of coin selling cars to people with no or bad credit, because many owners default and the dealer can repossess the car. Before signing your contract, read it carefully and make sure you understand everything.[xviii]

    • Bank check to see if at that place is a grace period for late payments.[nineteen] Ideally, the grace period should exist as long equally possible.

    Advertisement

Add together New Question

  • Question

    Do I have to go a cosigner at 18?

    Bryan Hamby

    Bryan Hamby is the possessor of Auto Banker Club, a trusted auto brokerage in Los Angeles, California. He founded Machine Broker Guild in 2014 out of a passion for cars and a unique talent for customizing the car dealership process to be on the buyer'due south side. With i,400+ deals airtight, and a xc% client retention rate, Bryan'due south focus is to simplify the machine buying experience through transparency, fair pricing, and world class client service.

    Bryan Hamby

    Professional Motorcar Banker

    Expert Reply

    Not necessarily, simply even if you don't need one you may desire 1. The loan conditions you're likely to be approved for are unlikely to be very favorable when you lot're eighteen. The interest charge per unit may not be very good if you are approved, and a cosigner with a longer and better credit score may be able to secure y'all a better, more affordable loan.

  • Question

    How do I know if my credit is good enough to get a loan?

    Bryan Hamby

    Bryan Hamby is the owner of Auto Broker Lodge, a trusted auto brokerage in Los Angeles, California. He founded Auto Broker Order in 2014 out of a passion for cars and a unique talent for customizing the machine dealership procedure to be on the buyer's side. With 1,400+ deals closed, and a 90% customer memory rate, Bryan's focus is to simplify the car buying feel through transparency, fair pricing, and world class customer service.

    Bryan Hamby

    Professional Auto Broker

    Expert Answer

    You tin expect it up ahead of fourth dimension! There are a lot of services online that will show you lot your credit score, but your all-time option is to contact the credit companies directly. It'southward gratis to retrieve your credit. This should requite y'all a sense for whether yous'll exist able to secure a loan or not.

Ask a Question

200 characters left

Include your email address to get a message when this question is answered.

Submit

Advertisement

References

About This Commodity

Thanks to all authors for creating a page that has been read 119,763 times.

Did this article assistance you?