No credit check auto loans are not just for people working on rebuilding their credit — they are also perfect for those of us just starting to establish a credit history, or for people who don’t want their credit history to show too many “credit inquiries”. Multiple credit inquiries can damage your credit, even if your score is high. Auto loans are important for many types of consumers across the spectrum — first time buyers and young people just starting out in their financial life, or people with a poor credit history or who have gone through a bankruptcy or divorce. If you have no credit, bad credit, or credit issues like bankruptcy and you absolutely need a car loan, a no credit auto loan is just what you need to secure an automobile. Very few of us can walk into a car dealership and pay cash.
Car Loans with Bad Credit
It takes special financing to obtain a car loan without the benefit of any history. Normally, car dealers use your credit score to establish your down payment, interest rate, and other features of your car deal. On the contrary, a no credit check car loan is made based solely on “capacity” — that means your ability to repay the specific car loan for which you are applying. The dealer wants to know that you have the income and assets to pay off your debt, otherwise they stand to take a serious loss on the car you’ll be purchasing.
If you have no credit to speak of, you can rely on your job and your income and other assets in order to qualify for a car loan. Everyone is having difficulty in the current economy, and for many of us our job is our sole source of pride and solid income. Luckily, your job can help you secure a no credit check auto loan.
If you are gainfully employed but are somehow still unable to demonstrate your capacity to repay the loan, you may still have hope. You can qualify for a no credit car loan with a cosigner — a person with solid credit history and good employment who is willing to put their name on the dotted line next to yours. In this circumstance, if you neglect to pay your loan, the cosigner will be responsible for the payments. This means you may have a difficult time finding someone willing to take on this role — but if you have a trusted family member or long time friend who understands your situation, you may still qualify for a car loan. This situation is fairly common — no credit check car loans are often secured by another applicant that has a strong credit history, and this seriously reduces the risk the dealer faces in giving a car loan to a person who otherwise simply wouldn’t qualify.
When you apply for a no credit car loan, you will often find yourself vulnerable to car dealers looking to exploit your circumstances, hoping to escalate their profit margin. If you are in the market for a car loan and your financial situation is bad, research your options thoroughly. Just because you have bad credit doesn’t mean that your car loan must come with exorbitant interest rates and penalties. There are many respectable car dealers who are willing to work with you no matter your financial situation. This may mean you’ll be doing more leg work, going from dealer to dealer, making phone calls and sending email queries, but your work will pay off. If you really need that new car loan, you’ll do the work necessary to secure it.
Good Auto Loans during Economic Troubles
You can easily apply for a no credit loan right at the car dealership. Car dealerships in America are facing the worst financial struggles they’ve ever seen, and this means they are more than willing to make deals with customers, even those with poor credit or no established credit history. Gift deals can be had, if you can afford a nice down payment.
When applying for a loan, you should consider the total price of the deal rather than just looking at the monthly payment schedule. Before filling out your application, secure a copy of your credit report, and take an overall look at your financial situation in order to decide how much you can afford to pay for a new car loan. If you have a narrow focus and look just at the monthly payments for the car loan (rather than the total payment price over the life of the car loan), your no credit loan could end up costing you more than you planned. As with all financial deals, taking the long view will save you money and frustration.
Once your no credit check car loan has been approved, there are some things you must do in order to build your credit and keep your car in your driveway. Obviously, you must be sure to make your car loan payment on time each month — if you’re going to run into trouble making a payment, do the responsible thing and talk to the lender. Many people are scared to admit that they’re having a bit of trouble, but an occasional slip is acceptable to most lenders, and communicating with your lender is always better than hiding and not making a payment. When it is possible to do so, make a little extra payment on your car loan each month. This will mean faster car loan repayment, and ultimately will result in reduced car loan interest over the life of the loan, making your car cheaper and boosting your credit worthiness in the process.