There’s not much worse than going into a broker or lender and finding out you’ve been rejected for a car loan. If you have bad credit and are fretting about finding car finance, you may scour the internet for a way around a credit check. At last – you find it! No Credit Check Car Loans. If you believe they’re a ticket to a car loan, you’re in for a bumpy ride.
Bad credit car loans are a leg up, not a way out
It’s tempting to think that by avoiding a credit check, car finance is a done deal with no questions asked. The questions and credit checks lenders ask before lending money is there for a reason. A responsible lender won’t lend money to someone who has little or no chance of paying back the loan.
By giving false hope to people who shouldn’t be borrowing money in the first place, it might set their finances back even further. Yes – it’s true these loans come with higher interest rates.
But over time, if you don’t miss repayments and are a good borrower, bad credit car loans may improve your credit history. Eventually you can even refinance your current loan for a better deal.
Bad credit car lenders may even lend up to 100% of the value of the car you’re buying.
No credit check car loans are neither
No credit check car loans assume you are the highest risk borrower. This means your car loan will come with the uppermost possible interest rate, sometimes up to and over 30%p.a. Many lenders force you to make a significant down payment on the car, so they don’t have to lend you as much money up front.
You’ll end up paying so much more in interest because no credit check car loans could take more than the usual maximum five years to pay off. At some point, the amount you have to pay off will exceed the total resale value of your car.
Almost every lender offering no credit check car loans will take your car as a security. This is in case you miss payments or default on the loan. They’ll also set up a direct debit payment as a condition of the loan. This means the lender will repossess your car if you’re unlucky.
Talk to an expert
Bad Credit Car Loans are the experts in finding fair car loan deals for people with bad credit. Our financial professionals have a wealth of experience, finding many Australians the bad credit car loans they need. Contact us for a quote or a consultation!