Can a College Student Really Get a Car Loan With No Credit?

Can a College Student Really Get a Car Loan With No Credit?
  • Opening Intro -

    Your ride has faithfully taken you back and forth to school for several years now, but clearly your car is exhibiting more wear and tear than what you can handle.

    With some financial help from your parents and your part-time job, a new car or at least a much younger used car appeals to you.


By Cedric Sheldon

And now you are faced with a dilemma — do you ask your parents to co-sign your loan or are you comfortable with trying to get a loan on your own, with the opportunity to build up your credit?

Although the first choice is the easiest route to take, it won’t do anything to help you build your credit. The second choice, as difficult as it may seem to pull off, is still possible even for the student with no credit or bad credit.

A few years back, right after the stock market meltdown, your chances of receiving credit would have been nil. Today, your prospects have improved simply because lenders are willing to loan money to people whose credit score is in sub-prime territory. Not too many lenders will do so mind you, but enough of them to make it worth your while to find out more.

The change has come about largely because there is always demand for credit from people who have no established credit or bad credit, what lenders call “subprime buyers.” Lenders look at each loan application individually, but the following are three points to help you get behind the wheel of a low-cost new or late model used car:

1. Ask your parents for help — You’ll still build credit if you apply for a loan yourself, but your payments must be something that you can manage. This is where your parents can help: by providing you with the cash you can use toward your down payment. The larger the down payment and by trading in your clunker, the more cost effective for you. If your parents “gift” you some money, then they can show you that gift on their income tax return. They’ll get a tax deduction and your payments are be more manageable even with a part-time job.

Do You Find This Piece Helpful?


A Selection of Our Best Postings

rss feed


2. Find out your credit score — Not sure where you stand credit-wise? You can find out quickly by visiting and pulling up your credit score. You won’t have a score, however, if you’ve never applied for credit. But, even most students have a credit score and just aren’t aware of it. Likely, since you went off to college, you did SOMETHING to trigger a credit alert, such as having received a cell phone in your own name. A score below 598 means your credit is bad, so be warned.

3. Talk to lenders — Before you apply for credit, ask a lender if he can work with you. Some will tell you immediately, “no,” while others will want to learn more about what kind of car you’re looking for, your down payment, income and savings. You may not be able to buy that $17,000 brand-new Ford Fiesta, but you might receive approval for financing a 2009 Kia Spectra hatchback in very good condition that a private party is selling for $10,345, the price Kelley Blue Book says that it is worth. Chances are the Spectra is in much better shape than your current ride!

If all three points work out for you and you have the means to make your monthly payments, then go ahead and apply for a loan. Keep your loan terms to no more than 48 months with terms of 36 or fewer months even better. You’ll build credit by making timely payments every month and that will put you in a better position to get a new car after you graduate and land a good-paying full-time job.

Author Information

Cedric Sheldon writes for the Olathe Toyota Parts Center and its Toyota Parts Blog, the latter featuring “no bull” experts from a wide array of disciplines: engines, electrical, fabrication, transmissions and other disciplines.

SaleBestseller No. 1
BOSS Audio CH6530 300 Watt (Per Pair), 6.5 Inch, Full Range, 3 Way Car Speakers (Sold in Pairs)
2836 Reviews
BOSS Audio CH6530 300 Watt (Per Pair), 6.5 Inch, Full Range, 3 Way Car Speakers (Sold in Pairs)
  • Impedance: 4 Ohms, System Frequency Response:100 Hz to 18 kHz, ±1 dB, Sensitivity: 90 dB
  • Woofer Cone: Poly Injection, Voice Coil: 1 Inch Aluminum;Mounting Diameter:5.5"
  • Surround: Rubber, Basket: Stamped
Bestseller No. 2
JVC CS-J620 300W 6.5' CS Series 2-Way Coaxial Car Speakers, Set of 2
184 Reviews
JVC CS-J620 300W 6.5" CS Series 2-Way Coaxial Car Speakers, Set of 2
  • 6.5" CS Series 2-Way Car Speakers
  • Power Handling: Peak: 300 watts / RMS: 30 watts
  • Mica cone ; Ferrite Magnet-Woofer and Neodymium Magnet -Tweeter ; Hybrid Surround
Bestseller No. 3
BOSS AUDIO AVA6200 Enclosed System  3-way 80-watt Enclosed System Speakers
25 Reviews
BOSS AUDIO AVA6200 Enclosed System 3-way 80-watt Enclosed System Speakers
  • Enclosed System 3-way Speaker Pair
  • 80 Watts MAX 40 Watts RMS Power Handling per Pair
  • 100 Hz to 20 kHz Frequency Response and 90dB Sensitivity

Last update on 2019-11-21 / Affiliate links / Images from Amazon Product Advertising API


end of post idea


Helpful article? Leave us a quick comment below.
And please share this article within your social networks.

facebook linkedin pinterest

Amazon Affiliate Disclosure: is a participant in the Amazon Services LLC Associates Program, an affiliate advertising program designed to provide a means for sites to earn advertising fees by advertising and linking to The commission earnings are used to defray our cost of operation.

View our FTC Disclosure for other affiliate information.

Categories: Campus Cars