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Can You Get Car Finance With No Credit Check?

Would you love to buy your dream car? Worried about your credit score? Lets see if we can help you! On the whole, an excellent credit history is paramount for any individual seeking a loan. As standard procedure, financial lenders need to see your credit score before advancing you any cash. However, if you are worried that your credit profile is not in order, there are other ways, to navigate the process. Let us guide you...

Most car buyers don't have the lump sum they need to buy a vehicle out right. They require finance from a lender,  allowing them to spread the cost with  monthly repayments. Before committing to giving you a car loan, your lender will have to carry out a background check to ensure that you can meet the financial obligation. 

What if you don't have a good credit history? Don't panic! There are several options for you still to get car finance with no credit check and still prove your reliability. 

How To Get Car Finance Without Credit Check

Get A Co-signer

If you approach a lender with a bad credit history, there's a high chance they will not approve your application. However, having a reliable co-signer with a perfect credit score can change your fortunes. A co-signer makes you look trustworthy. 

A downside to this is that if you default your payments, the burden falls on your co-signer. As the borrower, you mustn't miss any instalments. Late or missed payments significantly damage your co-signer's credit score and will potentially damage your personal relationship too!

Use Community Banks or Credit Unions

Compared to banks, community banks and credit unions are often more considerate. These lenders might be more lenient when giving out loans. Besides, some of them have programs in place for first-time buyers, which may work for you.

The critical things is to carry out proper research on where to access these types of facilities. Most of them are designed for individuals who have little or no credit score. They might look at some other aspects,  including your monthly utility bills or job stability. As a borrower who wants to get car finance without a credit check, this is one of the options you can explore.

Use Dealership Financing

Some of the dealers have links with car marketers, which might work in your favour. If you can't approach a bank for financing, consider dealerships that give loans to individuals with a bad or no credit rating. However, not all dealerships have access to these programs; therefore, you have to research which ones do. 

You can contact the dealership financial manager to find out what  they need from you. Once you provide the details they need, you can often get an excellent deal to finance your car. Something to think of is that with this approach, the lender might also require you to make a big downpayment.

Find Alternative Financing

Without a credit card or mortgage, it might be hard to build a credit history. However, there are several alternative plans that will allow you to finance a car without a credit check. You can quickly get payday loans, but these are meant to be short-term and come with high interest rates. These types of loans require no credit checks, but can carry an APR of up to 400%. Ouch!

Some lenders also use a non-traditional method for credit scoring. These alternative models look at your month to month income and spending, and therefore your ability to pay back the loan. If the lender is satisfied with your past income/spending, you can get a loan. Worth checking this out, as this might be perfect for you.

Utilise Utility Bills

Before approaching a lender to finance your car with no credit check, gather all the documentation for loans you have taken out and paid back previously. Any proof of loan repayment on household items such as furniture or another vehicle could make your application easier.

During your appointment, you can also tag along with your utility bills in your name as proof of payment. If you have any other assets of value, you can present this information to your lender. These assets can act as collateral for your loan. 

Work With A Broker

If you cannot find a co-signer or a lender willing to finance you, get yourself a broker. In the current financial world, you can find a market for anything, including loans. An excellent broker will analyse your financial and credit data and represent you to the financier. Your situation must be impeccable for the broker to receive cash on your behalf.

Pros Of A No Credit Check Loan

When choosing a financial lender for your car loan, it's best to go for a reputable one. You can get car finance with no credit check in the UK by checking if they are registered with the Financial Conduct Authority (FCA). This protects you from loan sharks and suspicious companies.

Here are some of the benefits of this arrangement.

Flexibility

Reputable lenders specialising in auto financing have better financial backing. Because of this, they are more flexible in their terms and conditions. They have relaxed requirements when it comes to interest rates, repayment periods, and terms.

Simple Application Process

Since the lender does not have to do a deep background check, their approval rate is faster than with a traditional bank. The lender only requires vital information such as your address, proof of residence, and income. You can often complete the application within the same day, and then make your downpayment.

Cons Of A No Credit Check Loan

Expensive Interest Rates

Based on your poor credit history, the lender is putting his/her cash at high risk. Because of this, they tend to offer higher interest rates than usual to recoup potential losses. These increased costs make getting car finance with no credit check one of the most expensive ways to purchase a vehicle.

Car Limitations

As a high-risk debtor, your lender will limit the vehicle selection according to your income. Besides, once you default on the loan, the lender will repossess  the car immediately.

Credit Rating

The lender is not required to report to the credit bureau on your credit situation. Therefore, even if you make timely payments, you are not necessarily improving your credit score.

Summary

So, having a bad or no credit history hurts your chances of getting a car loan. However, don't give up as there are several options to get car finance with no credit check. Bear in mind though,  it might take sometime before you find the right financier for you.  It's best to carry out lots of research and get the best options in the market. Do get in touch with us here at Carmoola if you need more help. Good luck and happy hunting!

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