The Millennial Roadmap to No Credit Car Loans

January 11th, 2019 by

A woman approved for a no credit car loan in Indianapolis via her tablet

If you’re looking for a car loan, have no credit and are generally feeling overwhelmed by the entire process, you’re not alone. For a number of reasons, it has become more difficult for the current generation to buy houses, cars, and secure loans. But fear not! There are always options available, especially for no credit car loans in Indianapolis and the surrounding area.

 

Among the constantly changing financial and social landscapes of our society, every generation does things a little bit different than the one that preceded it. And as practically anyone reading this article will know, millennials are no exception. This is a generation that has achieved meme-worthy status through their alternative approach to adulthood and their ability to confound, upset and confuse the generations before them. When researching this article, my first suggested Google result was—and I swear I’m not making this up— “do millennials even eat,” but I digress.

 

The point I’m making here is that although each generation does their own thing and tackles life in their own way, they still have to conform to the groundwork that is already there. Whether this is getting a mortgage on a house, choosing a healthcare plan, or financing a $30,000 car, you need to know how to negotiate these processes in order to live your life. Let’s talk about some of the challenges young adults face when purchasing their first car and some strategies for securing financing and getting yourself on the road.

 

Navigating No or Poor Credit

 

Regardless of the reason, if you’re approaching a car dealership with no or very poor credit, you may have a difficult time receiving a financing plan that fits into your budget. This can put someone that’s already in a tough spot into a nearly impossible position for actually purchasing a car. Here are a few things to consider when it comes to your improving your credit or finding another method to making your purchase.

 

Always keep an eye on your credit– This one may sound silly, but it’s important enough that it doesn’t hurt to mention. If you’re just getting your first credit card or haven’t had one for very long, pay close attention to your credit card bill due dates and the balance you maintain. If you consistently pay your bills on time, it will go a long way in helping you establish strong credit. Also feel free to do research online for other ways to improve your overall credit score, one of which being to keep a low balance on your account whenever possible. This particular entry won’t be helpful to someone who is already struggling with their credit, but if you’re just getting started, being extra careful with that plastic in your wallet could save you a ton of hassle in the long run.

 

Cash or cashier’s check– Another obvious solution to avoiding the sting of bad credit is to purchase your vehicle upfront with cold hard cash or a cashier’s check. You can also save up for a substantial down payment, which will reduce the amount you owe in your financing plan. This is obviously a very difficult option for many people who won’t have that much money to put down at once. But if you are able to save up enough and make this a reality, you can avoid costly financing plans and also the possibility of further damaging your credit through these plans in the future.

 

Explore your financing options– It’s important to remember that even as someone with limited credit, you have a handful of different options to explore when looking for a loan or financing plan. While the first thought that some customers may have is to get your financing directly from the car dealership, this may result in a higher rate than what you could find elsewhere. Especially if you’re carrying poor credit, dealerships will view you as a risky client and give you a less than ideal rate. Another option is to check with local banks and credit unions to see what kind of rate you could get on a loan. While it is true that you may have trouble securing a loan anywhere you go with bad credit, there is a higher chance that you can work out something advantageous at one of these establishments.

 

Find and utilize a cosigner– Most people in the millennial generation will be all too familiar with the concept of having a cosigner or guarantor act as a resource when trying to secure something out of your budget. A guarantor is someone (usually a parent or guardian) that makes significantly more than you do or has superior credit and is willing to attach their name to the lease of an apartment, the deed of a car, or a loan to minimize risk. A guarantor states that they are willing to accept the risk along with you, making the terms of the deal more attractive to the bank or dealership. If you have someone in your life that would be comfortable helping you in this way, it is an option that is worth exploring.

 

Understanding Car Loans

 A woman stressed by bills and payments searching for no credit car loans in Indianapolis

While many car buyers could likely tell you a lot about cars; what they want, how much they cost, how fast they go, it is less likely that these same customers can tell you about car loans and financing. These obviously are very important to understand before approaching a dealership or bank. Once you have a good grasp on the concept, you stand a much better chance of finding yourself the best plan possible.

 

The first loan we will cover is through your local bank. Typically, a bank loan will be heavily dictated by the length of the loan term, the annual percentage rate (APR), and of course, the amount of the loan. While it may be attractive to opt for a lower monthly payment or a longer period to pay your loan off, this will generally increase your APR and the overall amount that you owe. Be wary of this when shopping for a plan and weigh all of your options both in the short and long term before making a commitment.

 

Next is securing a loan through the dealership where you are buying the car. The benefits to this option are obvious; you can drive home with your new car and secure a loan all with one convenient stop. However, it is crucial to consider that the dealership is well aware of this convenience too and will often pose higher rates or be less forgiving of credit risk. Another factor to consider is that dealerships are still using banks, they are just acting as the middle man. This fact causes the price to increase and could prove more difficult for you if you have to deal with an annoyed bank on the other side of the country. The dealer can sometimes work to your benefit during special promotions such as holiday weekends where they offer low APR financing and other deals to entice customers.

 

If you remember these pieces of advice, you should be well prepared to at least start researching your best options for financing. Go say “hi” to your local bank, get to know them and see if they would be willing to help in your next purchase. Remember that dealerships will often use their convenience to raise your APR and monthly payments, but keep an eye out for special holiday promotions.

 

Dealership Alternatives

More closely aligning with millennial shopping habits and increasingly helpful for those with little to no credit are online dealership alternatives such as Online.cars. This service is handled completely via the website and can personalize the shopping experience from picking out a car to having it delivered to your door. And those with less-than-stellar credit are assured to be given financing!

Don’t Be Afraid!

 

Fear not millennials, you’ll be okay. While the world of loans, APRs, and predatory bank loans can sound scary, all you need is a good understanding of how to navigate these paths. Always work on building your credit and saving money when you can in order to be prepared for that big purchase when it comes. If your credit is less than perfect, that’s okay too! There are a lot of options out there to help any kind of person buy their first car, especially those looking for no credit car loans in Indianapolis. So, stay confident, find the right car and financing plan for you, and don’t let the snowflake jokes get you down.

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