If you need a new car but you’re afraid that your credit may keep you from getting it, then no credit check auto loans may be right for you. These loans allow you to get the financing you need, regardless of how bad your credit is. They have both their benefits and drawbacks, but knowing more about how these loans work is the best way to make sure that you’re getting the best car loan rates available. Here are some strategies you can use to secure a 100% financing loan:
Before you begin the loan application process, you should get copies of your credit report from all three of the credit reporting bureaus. Once you have this information, you should look at your reports and correct any errors you see. To heighten your chances of getting an auto loan at a lower rate, improving your credit score will go a long way. It may take a few months to see a difference in your credit score, but it will be worth it. Generally, the higher your credit score is, the easier it is to get low rate car loans.
Besides your credit, your source of income is probably the single biggest factor in getting the best car loan rates. Lenders like to see applicants that have been at the same job for six months or more. If you don’t have a job, get one, and when you get one, stay at it so that you can build up a work history. People that can prove they’ve held down a job for a minimum of 90 days have a much better chance of getting their loan.
If you put down as much money as you can possibly afford, you increase your chances of getting a 100% financing loan. By the lender’s logic, the more of an initial investment you put on your vehicle, the less likely you are to end up in default. If you don’t have a lot of cash on hand, consider using your current vehicle as a trade-in.
If you haven’t already, consider buying a good-quality used vehicle instead of a new one. Obviously, used vehicles have much smaller price tags, and you’ll need a much smaller loan amount to be able to afford one. A smaller loan equals lower interest and monthly payments, and these smaller loans present much less of a risk to lenders. They’ll be more likely to extend this kind of loan to someone with no credit check.
No credit check auto loans definitely have their place, but before you sign, be sure you’re aware of how they work. These loans are best used for emergency purposes, such as when your vehicle breaks down and you’re without transportation. They typically carry higher interest rates, but it’s possible to find a loan with a more manageable rate. When used carefully, they can be a great way to get the car you need when you’re strapped for cash.