Auto Loan FAQ

How do I finance a car with no credit?

It's very difficult, but not impossible, to get a car without credit. You'll need a good job and steady income to have a chance. If you don't fit into that category, chances are you'll need a cosigner to be approved. If you can't get a cosigner, you'll have to build up your credit-generally, a timely process.

How long do auto loans last?

Car Finance Auto Loans last for 36, 48, 60, or 72 months. Shorter auto loans have lower interest rates and end up saving you money in the long run, but the monthly payments are higher than long-term loans.

Do I need insurance to get an auto loan?

You sure do. Nearly all lenders secure their investment (your loan) with the vehicle itself. The financing agency also loses its investment if the car is stolen or lost. Consequently, lenders protect their interests by requiring you to get insurance for liability, collision, and/or comprehensive coverage. Each individual lender determines the amount of coverage necessary, and it often varies between companies.

Do I need to use all of the money from my loan on my car?

Yes you do. Lenders only give out as much as they can secure from the car itself. Accessories and such are usually financed during the purchase, and lenders will rarely finance unnecessary additions to the vehicle. Sometimes you can reapply for an amount higher than the maximum previously determined by your lender.

How is my interest rate determined?

Your credit history, down payment, and potential risk all affect your interest rate when you apply for a car loan. Make sure to check your credit report before searching for a car.