No Credit Car Loans for Teens

Posted by on July 15, 2019 @01:10:49 EDT
No Credit Car Loans for Teens

Autoloan.ca provides no credit car loans to anyone younger than 21 who are just beginning their credit journeys. When it comes to finding financing for a car, teenagers are often at a disadvantage. It is common that many teenagers have not had the chance to establish a credit history when it comes time to buy their first car, which can cause some issues when it comes to finding financing options. Unlike other lenders that require individuals who are applying for a loan to be older than 18-years-old and have a good credit history, we do not base our approvals on your credit score.

Beginning Your Credit Journey as a Teenager

The idea of accumulating debt can be daunting and sometimes even discouraging, especially when you are not entirely sure of all that it entails. However, credit is not something that should scare you or deter you from getting that car you need.

15% of your credit score is comprised of the length of your credit history. This means getting started on building your credit as soon as possible is one of the best ways you can ensure that you obtain a good credit standing.

Additionally, it is important to understand what other aspects make up your credit history, that way you can make educated and responsible decisions when it comes to credit. Altogether there are 5 components of a credit score. We have already discussed one of them and the rest are as follows: 35% of your score depends on your payment history, meaning whether or not you have made your loan repayments on time and in full. Another 30% is credit utilization, which means the percentage of available credit that has been borrowed. In other words, don’t max out your credit cards. 10% is made up of the types of credit you have, or your credit mix, which can be a credit card, a car loan, student loans, and more. The final 10% of your credit score is reserved for any new lines of credit you may open.

Close up of a woman looking in her car’s rearview mirror

Why Building Your Credit History Is Important

A positive credit score will aid you significantly as you make the transition from adolescence and into adulthood. There will be multiple instances in life where you will need a good credit score in order to achieve some of your goals. This could include leasing an apartment, buying and mortgaging your first home, or even turning your passion project into a fulltime business. Likewise, more and more employers are starting to include credit checks into their screening process when making a new hire. This means it is becoming increasingly more important to ensure you have a long-standing credit history, and a good one at that.

Now, you might be wondering how you can do this if you are under 21. Legally, you can only get a credit card under your name when you turn 18. The only exception to this rule is if you are put onto a special plan with your family. This will allow for your parents or guardians to monitor your credit spending and ensure that you are making payments in a responsible and timely manner. If you do not want to wait until your 18th birthday to start building your credit, this can be a great option for you.

That being said, there are not very many other options when it comes to building your credit history when you are under 18. Luckily, something you can do is take out a no credit car loan. Not only will this allow for you to obtain the necessary freedoms that come along with being a car owner, but you can also start getting your credit into good standing, which can help you in the future.

How a Car Loan Can Help Build Your Credit

Unfortunately, most young people with no credit believe that their only option to build their credit is with a small credit card account—because they think there is nothing else they can do. However, Autoloan.ca believes a car loan is a perfect way to start building your credit score as a teenager.

In comparison to other types of loans, a no credit car loan is relatively small. They have payment terms of specific monthly amounts. If you are diligent about making regular, on-time repayments of your loan, you can build a good credit history in no time. Additionally, if you pay above the minimum loan installment you will further prove that you are a reliable borrower, which can show lenders that you are capable of handling a larger loan amount in the future.

After considering what components contribute a credit score, and how to make yours a positive one, it is easy to understand how a no credit car loan can help any teenager build their credit history.

Close up of care - no credit car loans for teenagers

No Credit Car Loan Tips for Teens

Before applying for your no credit car loan, there are some things to keep in mind. The following tips will increase the chance of a teenager being approved for a car loan.

Find a Cosigner for Your Loan

Asking a parent or trusted adult with good credit to cosign your no credit car loan will improve the likelihood of getting your loan approved. This will provide the lender with security so that in the instance that the teen can’t make a loan repayment, there will be another individual held accountable.

This is the best way to ensure that you start off on a good foot with your lender and establish a good credit history for any future financing.

Save for a Down Payment

Before applying for your no credit car loan, make sure to save up a bit of money in order to make an initial down payment. The ability to put down anywhere between 10% to 20% right away will decrease the overall loan amount you need. This will make your loan repayments lower and more easily manageable each month.

In addition, a substantial down payment is a preventative step you can take against upside down car loans and negative equity. This means there is a smaller likelihood that you will find yourself stuck with a vehicle that is worth less money than you actually owe to the lender.

Pick a Used Car That’s Affordable

You may think that a new car is the way to go when choosing a vehicle, but this is not usually the case. New cars can be extremely financially disadvantageous, as they lose their value too quickly. If you are a teenager or a student, a pre-owned car is the way to go. To finance and insure a used car is more affordable, which will make your monthly installments much more manageable.

Where to Find Cars for Teens

After you have taken our tips into consideration, it is time to find the car you want and apply for a no credit car loan.

Although it can be incredibly easy for teenagers to find used cars for sale online through sites such as Craigslist and eBay, these sites can prove to be risky. They do not allow for the buyer to get a full sense of the vehicle before making a purchase, which increases the chances of potentially being scammed.

This is where Autoloan.ca comes in. When applying for a no credit car loan with Autoloan.ca, not only are you maintaining the convenience of sites like Craigslist and eBay, but you are also gaining that much-needed sense of security. Not only do we accept everyone’s loan application, regardless of their credit history or lack thereof, but we also provide our clients with the opportunity to choose a certified and fully inspected vehicle from our wide selection of options. We will help you find a vehicle that ticks off every item on your checklist that is simultaneously within your budget.

Teenager sitting on top of her car

Car Loans for Teenagers with Autoloan.ca

Our three-step process to getting a no credit car loan could not be simpler! All you have to do is fill out our easy online application. After you have taken 15 seconds to input a few personal details, your application will be sent off for approval. We approve no credit car loan applications from everyone, regardless of their current credit status.

After you have been approved, you will have the chance to browse our selection of over 5,000 new and certified used vehicles, which have been curated to fit within your needs and budget. Once you have selected the car that is right for you, we will deliver it to any location within Ontario, making the entire process hassle-free for you from start to finish. The best part? If you are not happy with the car you have selected, you have the option to swap it for another make and model.

With Autoloan.ca, teenagers will get approved for a car loan with ease. Even without an upstanding credit history or no credit history at all, we will work hard to ensure that you receive the best rates Canada’s leading banks have to offer for your no credit car loan.

It is never too early to start building your credit history. Don’t let your age keep you from getting that car that you need. To find out more about our no credit car loan approval rates for teenagers, contact us today!