First-Time Car Buyer Loan

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Shopping for your first vehicle is an exciting life milestone. But it also means that it is time to shop for your first-time car buyer loan. This prospect may seem daunting, especially if you are still working on building up your credit score. In this article, we will answer some questions about credit scores and interest rates for first-time car buyer loans.

Below, we also give you some recommendations for lenders for a first-time car buyer loan online. You can click on any of the links in the chart to be taken to the application pages.

Best First Time Car Buyer Loans with No money down – Bad credit OK

Up to $35,000
Starting at 6.90%
Bad credit
Loan Terms
2 months to 7 years
Use car as collateral
Up to $35,000
Starting at 5.99%
Bad credit
Loan Terms
3 months to 6 years
« Show more alternatives »

What is the Average Interest Rate on a Car Loan for a First-Time Buyer?

One of the top questions you probably have about first-time car buyer loans is what interest rate you can expect. That depends on your credit score. Below, you can view average APRs for new and used car loans based on different credit scores.

Source: Experian

You can see that with a higher credit score, you can qualify for a lower APR. It is also clear that APRs for new cars are lower than those for used cars. Of course, just as you may still be working on building your credit, there is a good chance that as a first-time car buyer, you will be shopping for a used automobile.

Tips for Applying for a First-Time Car Buyer Loan with Bad Credit

So how can you qualify for a new car loan with a competitive interest rate even if you do not have ideal credit? Following are some suggestions to point you in the right direction.

  • Consider applying for your first-time car buyer loan online. By doing so, you can compare a larger selection of loans. Quite a few online lenders also focus specifically on customers with bad credit.
  • Be selective about online auto lenders. Even though there are many reputable companies providing car loans online, there are also many scammers. Check to make sure that the lender you are considering is properly licensed in your state and follows responsible lending practices.
  • Apply for loans with companies that conduct “soft” credit checks rather than “hard” credit checks. These alternative credit checks do not ding your score.

How to Raise Your Credit Score Before Applying for Your First Car Loan

Even though it takes time to build credit, there may be a few quick steps you can take now before applying for your first car loan in order to boost your score as high as possible.

  • Check your credit reports for errors. They happen with a higher frequency than many borrowers expect, and can unfairly reduce your credit score. Thankfully, you can contest them to restore your credit score.
  • Pay off any outstanding debts you can, and do not fall behind on current debts.
  • If you have a one-time late payment on your record with a company that you are otherwise in good standing with, call and ask if they will consider erasing that negative entry.
  • Sign up for Experian Boost. It is a free service that can instantly raise your credit score by including your utilities and phone bill payments.
  • If possible, reduce your credit utilization below 30%. You may be able to do this by paying off part of your balance or by requesting that your limit be increased.

Apply For Your First-Time Car Buyer Loan Now

Are you ready to finance your first automobile purchase easily and affordably? Click on any of the links in our chart to apply through one of our recommended online auto lenders.