Dec. 27, 2022

No Credit Car Loans: 7 Crucial Things You Need To Know

Learn the most important information to know about no credit car loans, such as how it works, the requirements, where to find a loan, and more.

This article will show you the possible ways to get a no credit car loan if you have no credit history. If you need a car but having no credit seems like an impossible situation, but at MCMC, there are still options:

There are other options

Before applying for a no credit car loan, there are other avenues to consider, such as:

  • a personal loan from family or friends
  • using savings
  • withdrawing from a retirement account
  • trading in your current car
  • using equity to borrow

If these aren’t options don’t work for you, it is possible to build credit before applying for a car loan, by getting:

  • a credit-builder loan; or
  • a credit-builder credit card

However, if you need a car immediately, and don’t have time to build credit, there are still ways to get approved:

Before you apply, it may be a good idea to make sure you actually don’t have credit, by checking your credit score for free through sites like Credit Karma. If it turns out you have credit, even if it’s not good, you can still get approved for a car loan with bad credit.

The basic requirements for a no credit car loan

In order to qualify you must:

  • be at least 18 years old
  • have a valid driver's license
  • be a legal USA resident
  • not currently be bankrupt
  • have disposable income. Ideally, over $2000 a month after rent and necessary expenses such as bills, preferably from one source.

It is helpful, but not absolutely necessary, to have:

  • An eligible cosigner. This all but guarantees approval.
  • A good work history. We prefer you have the same employer for the past six months, and three years of employment with no gaps.
  • A phone bill.
  • Proof of residence, such as a utility bill.
  • An education history
  • Personal and professional references.
  • A down payment of at least $1000, or 10% of the car’s value.

How a no credit car loan works

With a no credit car loan, your job is your credit. If you have proof you earn enough to afford a monthly car payment, and that you’ve had consistent work, and are likely to keep your current employment, your odds of getting approved are higher.

A general guideline is to have at least $2000 left over every month after rent and all bills are paid. Also, a down payment of at least $1000, or ten percent of the car’s price is very helpful, although it is still possible to be approved with a smaller down payment.

Where can I get a no credit car loan

While most banks are unlikely to approve a no credit car loan, there are credit unions and online lenders that are more lenient. They have programs for first time buyers, which are designed for people with no credit.

If that doesn’t work, there are dealerships, like MCMC, that have in-house financing to help their customers secure financing.

What is the maximum amount of a no credit car loan?

Although there is technically no limit, someone with no credit will certainly have a very difficult time finding a loan for more than $10,000. Keep in mind: in general, the bigger the loan, the higher the interest rate.

How do we get you approved?

Dealerships vary in how they get you approved. Some have in-house financing, whereas with others you must be pre-approved. Some will help you budget first, and then find a car that fits, while others will ask you to choose a car, then try to work it into your budget.

At MCMC, our method is to first process your application and get you approved. Once you are approved, we show you which used cars fit your budget.

A no credit car loan can improve your credit

As long as your dealer reports your credit activity to all three credit bureaus (like we do), and you meet your monthly car payment, your credit will improve. Then, in time, you’ll be able to refinance your car loan and decrease your monthly payment, all the while building equity in your car.


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