Are No Co-Signer Auto Loans Possible For Everyone?

When you can't get an auto loan easily and have been troubled by rejection, co-signer becomes your answer. A co-signer is a back-up for somebody who's doesn't qualify for an auto loan. From the car loan borrower's perspective, co-signing is a great way of securing auto financing options. Co-signer vouches for you when the lender has doubts about you.

Getting a Co-Signer Is Finding a Needle in the Hay-Stack

A co-signer is great for someone with credit problems like bad credit scores, no credit history, etc. As a co-signer will infuse trust in the lender, your weakness will be over-shadowed. But, is finding a co-signer easy? The answer is a big NO. From the perspective of a co-signer, you are a risky proposition. If you don't make the payments, his credit score will have to take the dent.

Also, his assets would be in danger. In this economy, when everyone's credit score has taken a hit, no one wants to assume the risk of someone else. Also, for ` co-signer, you need someone with a decent credit score and a good debt-to-income ratio. These criteria make the search all the more difficult.

No Co-Signer, No Car Loans?

Think all these problems hampering your car dream? Well, auto loans without co-signer are your answer. Most car buyers consider no co-signer car loans to be a privilege and reserved for the excellent credit score. But, the reality is not so. You can get a no co-signer loan even when you are surrounded by credit crises. For understanding the situations in which you can get an auto loan without co-signer, you must understand the loan approval criteria.

Most auto loan borrowers commit the fatal mistake of considering credit score as the single most important factor for getting no co-signer loans. But, there are many other factors which affect your approval chances:

Credit Score - Higher score improves approval chances.
Credit Profile - A longer term gives lender a good chance to ascertain the risk.
Term of Loan - A shorter term means less risk and thus, lower interest rates.
Loan to Value Ratio - Lesser the ratio, better the chances of approval.
Down Payment - 10%- 20% will work.
Employment Term - You need to be working for at least six months.
Income - A decent income is a necessity. $1500 per month is a must for most lenders.
Time at Residence - Half year criteria applies here as well.
Age of Vehicle - If you are buying a used car, it shouldn't be older than six years.
Miles on Vehicle - Most lenders won't finance a car which is older than 80,000 miles.

Can Bad Credit Shatter My Car Dream?

All these requirements decide your loan approval, not one. So, when you have a bad credit score and want to avail car loans without co-signer, other factors should be strong. If you have good income or have a stable job, approval would be easy for you. If you decide to buy a less expensive car, approval would not be difficult.

When You Have a No Credit History

You have no credit score when you have never availed credit or are new on the credit scene. This makes your credit profile non-existent. When you have a zero credit history, lenders are not able to ascertain the risk associated with you. You must give them a reason to trust you. You can do so by increasing your down payment amount, going for a cheap car, opting for a shorter loan term, etc. If you improve on other approval criteria, getting a no credit no co-signer auto loan will be possible for you.

Student Auto Loans without Co-Signer

When you are a student, a car is a requirement and searching for a co-signer is quite a trouble. For getting a car loan with no co-signer, you must have a job that pays you well. Also, a down payment would help you. Get better on other factors so that your loan application will be accepted even if you have a no credit score.

First Time Car Buyer's Tryst with No Co-Signer Vehicle Loans

When you are buying a car for the first time, you can avail a car loan without co-signer. All you need to ensure is spice up other requirements. If you have a good paying job and have been regularly paying your utility bills, then the lender can establish you as someone who is regular in paying-off liabilities. This will increase your chances of getting no co-signer auto financing.

A no co-signer auto loan is great for almost all types of credit problems and situations. Getting it is easy when you know how to tackle the approval criteria.

So, next time you think of auto loans without co-signer, highlight your strong points to the lenders.

Remember that car loans are easy when you have the will to achieve it.


Article Source: Rock Watson