The 5 Best Companies That Offer No Credit Check Car Loans
Getting a car without a good credit score seemed impossible in the past. But thanks to no credit check car loans, acquiring a vehicle has never been easier. A no credit check auto loan is a form of a lend in which the financier offers money in advance for car purchases to an applicant without checking their credit score. A credit score, on the other hand, is a notation made by credit bureaus whenever you make a payment or contrariwise on products you bought on credit. It means that national credit firms like Visa or MasterCard and various other businesses that offer credit purchases like insurance companies, gas stations, departmental stores, utility companies, telephone companies, etc. all submit an account of your payment conduct to credit bureaus.
FICO, formerly Fair Isaac Corporation is the leading credit reporting company or bureau in the United States hence the commonly used term “FICO score”. Credit bureaus give a numerical value, which is an equivalent representation to the apparent risk you signify. It is a result of keeping track of your payment history, which is your payment timelines, including whether you carry a balance, settle your account in full each month, or if at all you make payment. Some credit reporting firms consider other factors like your work history, how the economy impacts your capability to pay, and a stable income.
No credit check car finance, however, does not consider your creditworthiness. The loan is available at various lenders, banks, or credit unions. But it is advisable to go with the choice of a modest car. An expensive vehicle might hurt your finances due to high monthly remittance, which may potentially damage your financial standing in the future. Take caution when reviewing the loan. There are many available options when it comes to no credit check auto loans. Some lenders may charge extremely high-interest rates as a result of waiving requirements. Avoid loans with shorter repayment terms and a high standard of interest. It might end up trapping you in endless debt.
Why No Credit Check Auto Loan is a Good Option?
It is tough to access a car loan with a low credit score. You may be required to pay a significant sum of money upfront or pay a deposit. Other lenders, in this case, will offer a high interest rated loan as mentioned above. However, no credit check car loan offers favorable terms in comparison to a different type of loan available for consumers with poor credit rating but still want to own a car. The following are reasons why no credit check auto loan is a good option under prevailing circumstances:
- Easy and cheap to apply: There is no need to pay anyone to help take care of the process. Simply submit a request directly to the lender for consideration.
- No down payment required: An applicant who wants to get a car through this facility can either put up collateral or pay a fully refundable deposit.
- Ideal for people with bad credit: offers an opportunity for those with poor credit scores to acquire cars without the worry of how to make the payments.
- Offers competitive interest rates: This loan, similar to other regular loans provides favorable interest rates despite the credit score.
- Helps build a good credit score: It enables one to make a credit worthiness history, which will allow you to get loans in the future.
- Provides an opportunity to own a car: No credit check car loans allow one to own a car even with bad credit.
Requirements of No Credit Check Car Loan
Yes, indeed, like any other type of loan. The requirements are set as security in case one may default payment. However, you can input additional requirements on top of the established minimum. By doing so, you stand high chances to get approval and a low-interest rate cap. These are the requirements:
- Show of steady employment: some lenders may need to know your employment status. Submit a few recent payslips and some information concerning the employer as proof.
- Sufficient monthly income: Lending institutions have a set minimum requirement for monthly income. It may be in the form of mixed wages, disability payment, social security benefits, state assistance, etc.
- Proof of ability to repay: To gauge whether you can pay the loan, some companies set a maximum debt-to-income ratio (DTI), which is a result of dividing monthly debt payments by gross income. A lower DTI increases your creditworthiness and grants a loan.
- A sizable deposit: Lenders will take your collateral to account when underwriting a loan and putting an interest rate. The more money you can deposit, the less you will require to borrow.
- A co-signer: A co-signer is responsible for making monthly repayments if you fail to comply. A co-signer with a good credit history will significantly expedite the approval of a loan.
- Pledge collateral: The car you buy will serve as collateral for the loan. However, you can pledge in more assets such as stocks, home equity, bonds, cash in a savings account, etc. to fast-track approval for your loan. It will increase your loan security, and lending institutions view this move as much safer making it easier to get a loan at a low-interest rate.
Which Type of Companies Gives a No Credit Check Loan?
No credit check loan lending institutions are in three broad categories shown below. The grouping mainly depends on the platform, company ownership, nature of the loan facility, etc.
1. Online lenders
Several established virtual lenders offer online loans with no credit check. Some are Experian loan partners such as Lending Club and Upstart but still have options for people with poor credit history. Online lenders look beyond your creditworthiness or score when perusing through your financial profile to facilitate a loan for you.
2. Credit Unions
Credit unions are nonprofit financial institutions such as banks owned by members who are the customers. They seek to serve their members as opposed to making profits. Thereby they offer much better rates and reduced fees compared to other financial institutions. A member can get a loan without a credit check. The investment comes at lower rates and better terms than other lending firms. Membership is per affiliation, and it can be on where you live or your employer. You can contact your local union or employer to join.
3. Payday Loan Companies
Payday loans no credit check also referred to as cash or check advance, are a short-term borrowing often with a high-interest rate based on borrower’s income and credit profile. They are ideal for people who need a quick injection of money before their next payday. There is no need for a credit check to access the loan. Their annual percentage rate (APR), although, is at all times high. By comparison, a right loan might carry an APR of 10% as opposed to an average payday loan charging 400% APR, in addition to short repayment periods and high fees. There are also title loans available the same as payday loans that do not require a credit check. Under title loans, you should hand over the title of your car to the lender as collateral. The amount you borrow is equal to the worth of the vehicle, and you must have the absolute ownership of the car. In case you fail to repay, the lender may repossess the vehicle. Payday and title loans are ideal in dire financial need.
How to Get Approved No Credit Check Car Loan?
Getting a no credit check auto loan involves a few easy to follow steps listed below.
Step 1: Decide on the type of car you need
Choosing the type of car you want will determine the amount that you should borrow. It is advisable to stay within your means and by finding the right amount of loan that you can remit monthly in full and on time. Factor in the duration of repaying the loan and a favorable monthly figure that will not hurt your pocket.
Step 2: Find a suitable loaning institution
Different lenders offer varying loan facilities. You should choose a lender based on your financial needs. Compare all of your options so that you can find the best loan, which is competitive. Look out for things like APR, duration of repayment, charging fees, deposit, etc.
Step 3: Check the requirements and APR
It is one of the crucial steps when applying for a no credit check car loan. Lenders have a list of minimum requirements for a loan to be approved. Deposit or collaterals majorly contribute when it comes to establishing the interest rate.
Step 4: Prepare the necessary documentation to apply
The essential information needed depends on the lender. However, documents that confirm your identity verify your income, show your address, proof of employment are some of the necessary prerequisites you should ready and make available on request by the lender. Additional documents concerning the collateral may also be needed.
Step 5: Fill out and submit an application form
It is the final step once you have established the right loan. Many lenders offer an online application, which is convenient. You may apply via phone or in-branch. Duration for approval differs from a few hours to a few weeks.
The 5 Best Companies That Offer No Credit Check Car Loans
In the past, car loans were a preserve for those with a positive credit score. Lending institutions were few and observed strict adherence to the creditworthiness of an individual. However, with the increase of loan institutions and dealership, a new era has emerged whereby your credit score does not matter anymore. Below are the top five companies that give car loans to people with a low credit score.
1. Car.loan.com
The lender has been operating for the past 25 years. Car.Loan.com gives car loans even to those without a creditworthiness history. It has easy application steps which are available online.
- APR: Between 0 to 25% depending on your location
- Loan term: Varies by the lender
2. Auto Credit Express
Auto Credit Express Established in the year 1999, the firm has approved loans to individuals with poor credit history. The company boasts of extensive nationwide coverage through its dealers.
- APR: Varies by network lender
- Loan term: Varies by the lender
3. Surbaban auto finance
Unlike other lending institutions, Suburban Auto Finance pays no attention to your past credit story. It offers suitable loans that can finance a wide selection of trendy cars.
- APR: Varies by network lender
- Loan term: Varies by the lender
4. myAutoloan.com
myAutoloan.com has been giving car and motorcycle loans since 2003. The application process involves four easy to follow steps which can take a record three minutes only to finish.
- APR: Between 2.74% to 27%
- Loan term: Up to 84 months
5. CarLoanLot
CarLoanLot has proved that any person can own a car and repay with the lowest interest rates available. The application procedure is simple and straight forward. The response is given under 24 hours, making the lender among the top operators when it comes to service delivery.
- APR: Varies by network lender
- Loan term: Varies by the lender
Learn More: How Do I Take Over On Car Loan Payments Contract?
Bottom Line
Getting a no credit check car loan has enabled many people with a poor credit history to buy cars. But, it is prudent to choose a vehicle that is within your budget. It will be much easier to repay promptly without denting your finances. Compare several lenders on their terms before settling for the best choice.
Frequently Asked Questions (FAQ)
How can I finance a car with no credit check?
No credit check car loans are available through dealers and direct lenders. You can either get them online or by visiting a branch near you.
Are there any loans with no credit check?
There are some loan facilities available that do not require a credit check, which includes payday and title loans.
Is it impossible to get an auto loan with bad credit?
Having bad credit does not hinder you from getting an auto loan. However, be keen when comparing loan offers to find a loan that is well within your budget.
What is the lowest credit score to buy a car?
There is no minimum set credit score to purchase a car. Many lenders have demonstrated working with people who have a score that is lower than average.
Can you get a car loan with a 450 credit score?
By giving collateral or a sizeable down payment, you can get a loan with a 400 to 450 credit score.
