Editor's choice: Carvana
- Most credit types welcome
- 45-day preapproval
- Seven-day guarantee
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While it can be harder to get approved for a loan without a cosigner, you still have options — even if you don’t have perfect credit.
Yes, you can get a car loan without a cosigner. However, your interest rate — and the amount you can borrow — will vary depending on your credit history and financial situation. Lenders prefer borrowers who are low risk, so if you don’t have the best credit, other aspects of your application need to be strong before you apply. Things like a consistent income and a down payment signals to a lender that you can repay your loan.
You can find a car loan that doesn’t require a cosigner at a bank, credit union, online lender or dealership — but which is best for you will depend on your credit.
Those with bad or no credit may want to turn to online lenders and dealerships first. While borrowers with good to excellent credit could find more competitive rates at a bank or credit union.
If you have bad credit, your options for finding a car loan without a cosigner are more limited. Some online lenders specialize in car loans for borrowers with bad credit. And there are buy here, pay here (BHPH) dealerships that offer financing opportunities to borrowers who don’t meet a bank’s strict requirements.
These typically come with higher rates — usually in the double digits — since you pose more of a risk to the lender. And you’ll also want to watch out for car scams like yo-yo financing and other tactics less-reputable lenders use to trick you into spending more.
If you don’t have credit or a cosigner, you may face the same limited options as a buyer with bad credit. This is because a lender can’t judge your ability to pay back the loan, making you more of a risk than someone with even a small credit history.
However, there are still car loan options available for borrowers with no credit. It can help to have a big down payment and regular employment if you want to go through a bank or credit union. Otherwise, you might have better luck with an online lender or dealership.
No, borrowers with good credit generally don’t need to apply for a car loan with a cosigner. In fact, you can typically expect a decently low APR when you have good credit, a steady source of income and limited debts — sometimes as low as 2% to 5%.
Lenders want to see cosigners for borrowers who may be higher risk. So if you’ve been building your credit history and don’t have any major red flags — like low income or a lot of debt — you’ll find that a cosigner isn’t necessary.
While requirements for a car loan without a cosigner vary by lender, you’ll likely have a better chance of getting approved if you meet the following criteria:
When you’re looking for a good deal on a car loan without a cosigner, keep these tips in mind to help your search.
No matter your credit score, you could find a car loan provider without needing someone to vouch for you. Banks and credit unions often offer low rates to borrowers with good to excellent credit, while those with bad or no credit may want to look into online lenders and dealerships first.
Want to learn more about the car-buying process? Check out our guide to car loans.
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