There are a few reasons that car loans that are offered with no credit check are a very bad idea both in the short-term and the long-term. I will explain the key points that you need to understand about this so that you can make a well-informed and educated decision about auto finance and rebuilding your credit history.
Auto loans with no credit check, otherwise known as guaranteed auto finance is only offered through buy here pay here car lots. These types of dealerships that offer in-house financing do not report to Equifax, Trans Union or Experian. What this means is that even if you make all of your payments on time, it will not rebuild your credit whatsoever.
These types of car dealerships also charge thousands of dollars more for vehicles than they are realistically worth. This is because the people that generally go to these types of car dealerships are desperate for financing and feel like they don’t have any other option. These types of dealers are able to charge this much money for a car because there is also no lender or loan company that is specifying how much money should be loan on a particular make and model. Basically, they make their own rules.
Interest charges. You can pay in interest rate as high as 30% any dealership that offers no credit check auto finance. It is like renting to own a car and is incredibly expensive.
In summary, auto loans that are offered with no credit check are a bad idea mainly for the three reasons specified above. They will not help you to rebuild your credit, you will pay thousands of dollars more on the price of the car as well as a tremendous amount more in finance charges.
My recommendation: There are legitimate sources online that can help you to obtain a real car loan and work with real lenders, regardless of your credit history. You don’t have to use a “no credit check auto loan” and you’ll be much better off if you scratch that idea.
Posts Tagged ‘ What This Means ’
Sep
If you are looking for car loans than there are a number of options that could be open to you.
One of these may be to try an online car finance broker to help you find the most appropriate loan for your own circumstances out of the numerous car loans that may be available on the market.
Applying is straightforward
You’ll need to supply a few basic details about yourself and your employment. This will allow a decision to be made about just how much you could comfortably afford to repay on your car loan.
You can then use this figure as a guide when looking for your new car.
Finding your car
Some car loan companies online may have their own dealerships where you can select a vehicle. Others may allow you to extend your choice and also look elsewhere.
You may need to bear in mind that to use car finance facilities such as these, your chosen dealership may need to have a valid consumer credit licence. This may make this type of borrowing unsuitable for a car purchase from a private individual for example.
Once you’ve located a car that you like, you’ll need to let the loan company know a few basic details about it. This will include its registration, mileage, how much of a loan you’d need and who you are buying it from.
This will allow them to calculate the loan they are prepared to offer.
Market value
A car loan is typically based on the market value of the vehicle rather than the selling price.
This helps avoid situations where your loan has a greater value than the car itself.
What this means in practice is that the amount the lender may be prepared to advance you will vary depending on the actual car you’re interested. It may not be:
l as much as the guide figure you may have been given when you submitted your application
l enough to cover the asking price of the car.
You can always contribute to the purchase yourself or perhaps offer your old car as part exchange.
Car loans can help you keep mobile if you decide you’d like to upgrade your vehicle to a newer model. Applying is often easy and fast.