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Buying a Car with Bad Credit and No Cosigner

Although it’s been discouraged to take out an auto loan with less-than-perfect credit (or sometimes encouraged to do so only with a cosigner), consumers are still persistent about bad credit auto loans—even without a cosigner. The good news is buying a car with bad credit and no cosigner is possible. And many lenders willing to finance in such conditions are open for business.

But before you get too excited and rush into a deal, take some time to relax and read through this quick guide. We don’t want you to go about the process uninformed.


Bad credit, which is indicated by a low credit score, is no fun at all. It makes obtaining credit more challenging. There are also the high interest rates waiting for you if ever you get approved. This is the reason why you may need a cosigner when taking out a loan with bad credit.

A cosigner, who must be someone you trust, willing to take on the obligation in case you fail to make the payments, and have good credit, can make you less of a high-risk borrower. In other words, lenders can lower your interest rate and may grant you an auto loan faster if they see you’re signing up with someone.

But convincing someone to be your cosigner isn’t that easy. And asking a close friend, family member or relative to be your cosigner puts the relationship at stake. You can still get approved for an auto loan even with bad credit and without a cosigner. But let us share with you some tips first on how to get approved easily.


Stable Income
Lenders would want to see that you’re earning well and enough for them to be convinced that you can be trusted with an auto loan. A stable income can be proven with more than a couple of your most recent pay stubs.

Down Payment
A bigger down payment can help you get approved for an auto loan with bad credit and no cosigner. Putting down more than the ideal 20% tells lenders that you are serious about the auto loan you’re trying to get and that you are willing to pay it off on time.

A bigger down payment requires quite a lot of cash, though. You will need to save up for this ahead or use the trade-in of your current vehicle.

Honesty and Full Compliance
Believe it or not, your story on how you got a low credit score and whether you comply with the requirements can affect the lending decision of your potential lenders. If you are serious about getting approved for an auto loan, make sure you don’t give lenders crazy excuses for your poor credit. A loan officer can help you draft a good explanatory letter for this.

Make sure as well that you completely fill out the application form with honest and authentic information. Wrong information or incomplete application can delay the loan decision or cause your application to be denied. You should also provide all the required documentation—and only authentic ones.


We suggest doing the following as you apply for an auto loan with bad credit and without a cosigner:
• Review your credit report and find out your credit score.
• Save up for a bigger down payment.
• Do away with expensive cars.
• Find legitimate lenders in your area and compare at least 3 auto loan quotes before picking a lender.

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