No Credit Car Loan Approval: Our 2 Minute Guide

No Credit Car Loan Approval: Our 2 Minute Guide

Posted on August 30, 2022

If you have just turned 18 or just arrived in Canada, you won’t have a credit history. This makes borrowing in any form difficult, but not impossible. Like most things in life, where there’s a will, there’s a way. Our Oakville auto loans team outlines how you can still get a car loan even if you have no credit history in Canada.

Car Loan with No Credit History

It isn’t the easiest thing to do, get an auto loan with no credit history. Most mainstream lenders won’t want to know and others will regard you as a high risk so will charge high rates.

Those high rates are something you’ll need to get used to in the beginning though.

Start building your credit history

Your first step should be starting to build a credit history. Get a credit card and use it, set up automatic payments so you never miss one. Use a phone contract that reports payments, use a landlord and utility companies that also report payments to the bureaus.

Even a couple of months of this can make a tangible difference to the rate you’re offered for the loan.

Save up for a down payment

Down payments are important for all types of auto loan but especially when you don’t have any, or a low credit score. The more money you can put down, the better the lender will feel about lending to you.

As you’re putting your own money at risk, lenders will feel less exposed, which lowers their risk, which will often result in a lower interest rate on the loan.

Or, in the case of no credit history, a higher chance of being accepted for the loan in the first place.

Consider a cosigner

If you just turned 18, you could consider a cosigner. Someone with a more established credit history who is willing to guarantee the loan. A cosigner is legally obligated to pay off the loan if you default and can go a long way to helping you secure a loan.

If you don’t have a credit history of your own, leveraging someone else’s can mean a lower rate on the loan.

Newcomers to Canada may not have that luxury, but if you do know someone here willing to cosign, it’s an option for you too.

Do your research

There are lenders of all shapes and sizes in Canada and there are sure to be some willing to work with you even though you don’t have a credit history.

Research online, check out specialist lenders, look at auto loan calculators and research as many options as you can think of.

Work with auto loan experts

Working with Oakville auto loan experts is another straightforward way to find an auto loan when you don’t have a credit history. We work with a range of lenders willing to consider people from all walks of life, in all situations.

When you’re ready for a car lease or loan, get in touch with the Oakville auto loan experts at Northway Ford for great deals on auto finance.

Thanks for reading. Be sure to connect with us on Facebook, Twitter, Instagram, or LinkedIn to stay up to date on our latest great articles!