If you are out to buy a car loan but feel disappointed with a thought that you will not obtain it because of having no credit history, you will be surprised to know that many lenders nowadays offer no credit check car finance programs. These lenders may grant an approval without requiring borrower to undergo a rigorous process of credit assessment; but even if you get approval, the only disadvantage you may have to bear is the high interest rates. This is because financial institutions think that there is a risk involved in lending money to people with no credit. But, if you put some efforts in learning few crucial eligibility guidelines on how to qualify for a no credit car loan at affordable rates, it will be advantageous to you.
1. As mentioned earlier, credit history is considered a major indicator of applicant’s past borrowing and repaying behaviors. If you have not started establishing credit history yet, you may start it now by purchasing a credit card and making timely payments on it for continuous six months before you apply for a car loan. Even though it might be easier for you to get a no credit auto loan, it could be tricky and difficult to obtain the same at affordable rates.
2. Down payment is often required by majority of lenders in a bid to recover a large portion of the loan amount in advance from someone who has no record of making credit payments on time.
3. You may also need to have stable source of enough earnings as well as steady employment as per approval standards of most of the car loans with no credit check dealers.
4. There could be few lenders who will also want applicants with no credit to pledge assets owned by them as collateral.
5. Even a better way to get the most competitive rates and instant approval could be to convince someone with a good credit record to cosign your auto loan. If you have a cosigner, lenders may be keen to grant you an approval because if you default, they get an opportunity to recover their loss from cosigner.
Prior to applying for no credit car finance which is also known as a high risk auto loan, it is necessary to be familiar with some important considerations that lender makes before deciding to grant approval and determining rates. If you find it difficult and challenging to understand these considerations and know different strategies of qualifying for an affordable auto loan deal, you should locate the most competent lender who could make you well-versed with insightful knowledge on the subject. In addition, an expert might also be aware of the proper process of searching for and choosing the right auto loan no credit program for your financial situation and completing the application procedure accurately.