How to get a no credit check car loan |
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How to get a no credit check car loan

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Want a car but have no credit or bad credit? Here’s how auto loans without credit checks work.

When your credit isn’t great, it can be difficult to find the financing you need to buy a car from some lenders. If banks and other traditional lenders refuse your loan applications, it can be tempting to turn to a lender that offers no credit check car loans.

Find out about this type of car loan before you apply and how to decide if it’s the right loan for you.

How do no credit check car loans work?

When you apply for a loan, a lender agrees to lend you money based on how likely you are to pay off your debt. They determine this by looking at lots of factors including your income, if you can secure the loan and your credit history. When you’ve made some financial mistakes that have affected your credit, it can make it hard to get a loan.

Lenders that don’t require credit checks assumes you have bad credit. Its decision to lend you money is based on your income, liabilities, employment status and financial situation.

No credit check means that these loans likely have high interest rates and unfavorable terms for you as a borrower, so they should only be used as a last resort.

Common features of no credit check car loans

  • A large down payment. You’ll likely need to leave a higher down payment to qualify for no credit check financing.
  • Your car as collateral. Most lenders will require you to list your car as collateral for the loan. So, if you fall behind on your payments, your car may be repossessed.
  • Direct debit payments. Most lenders will also require you to set up a direct debit arrangement to pay off the loan. If there aren’t enough funds in your account, you could fall behind on payments, not to mention pay any non-sufficient funds (NSF) fees your bank charges.
  • Long loan terms. Many no credit check car loans have terms in excess of five years. Combined with high interest rates, this could mean that the outstanding balance owed on your loan exceeds the resale value of your car.

Although these may be negative, no credit check car loans can give you access to finance when you may otherwise be unable to find a loan. In addition, many lenders are able to provide loans to people within a few business days.

Compare car loans for all credit types

Rates last updated September 21st, 2018

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Unfortunately, none of the personal loan providers offer loans for that credit score. If you are in urgent need of a small loan, you might want to consider a short term loan.
Name Product Product Description Minimum Credit Score Term of Loan Requirements Car Loans
Apply with a simple online application to get paired with a local auto lender. No credit and bad credit accepted.
Varies by lender
Must be a US citizen with a current US address and employed full-time or have guaranteed fixed income.
Auto Credit Express Car Loans
Get connected with an auto lender near you, even if you have bad credit.
Typically 3 to 6 years
Must be employed full-time or have guaranteed fixed income of at least $1,500/month and be a current resident of the US or Canada.
LendingClub Auto Refinancing
Lower your monthly car payments and save on interest through a fast and easy online application process.
Fair or poor credit
Minimum of 2 years
Car must be less than 10 years old with fewer than 120,000 miles. Current loan must have a balance between $5,000 and $55,000 and at least 24 months left in its term.
MotoRefi Car Loan Refinancing
A car loan connection service for borrowers looking to refinance.
1–6 years
Must have an income of at least $2,000/month and have a vehicle with less than 100,000 miles. Car Loans
Get up to four offers in minutes through one simple application. Multiple financing types available including new cars, used cars and refinancing.
24 to 84 months
Must have a Social Security number; make $24,000+/year; have no open bankruptcies.
LendingTree Auto Loans
Compare multiple financing options for auto refinance, new car purchase, used car purchase and lease buy out.
Typically 1 to 7 years
Must be a US citizen and 18+ years old. Must have good to excellent credit.
Capital One Auto Financing
You could qualify for a car loan of up to 40000, but not all dealers accept this bank's financing.
Good to excellent credit
36 to 72 months
Valid street address; existing Capital One accounts in good standing. Car must be a 2006 model or newer with less than 120,000 miles.
Wells Fargo Auto Loans
Auto loans with high loan amounts to cover your car purchase or refinancing needs.
Good to excellent credit
1 to 6 years
Your income and assets must support your existing debt obligations and the desired loan amount.

Compare up to 4 providers

What will I need when I apply?

When you find a lender, you’ll need to provide some basic information along with your application.

  • Proof of steady employment. This could include your last few pay stubs, information about your employer or any other job-related questions.
  • Ability to repay the loan. A lender wants to know you’ll be able to repay the loan, even if you have bad credit. A low debt-to-income ratio will help prove you’re able to handle the monthly payments.
  • A sizable down payment. The less you have to borrow, the better. This also indicates that you’re responsible enough to have a savings, making your application stand out more.

None of this guarantees you a loan, but it can improve your chances.

Alternatives to no credit check car loans

Even without the best credit history, you may qualify for a bad credit car loan rather than a no credit check car loan. The differences may seem subtle, but by allowing a lender to check your credit, you may be able to lower your interest rate and get better terms.

You don’t need to rely on car loans, either. A personal loan could help you find financing for a car. These usually don’t come with strict restrictions on how you can use your funds, so you’ll be able to make your purchase without using your car as collateral.

Are there any dangers when getting an auto loan without a credit check?

Unfortunately, yes. No credit check car loans can be expensive, and if you aren’t able to make the large monthly payments required by your lender, you face your car being repossessed. This process could further damage your credit, making it even more difficult to borrow in the future.

Not all lenders are reputable, so do your research before you borrow. Make sure the lender is appropriately licensed for your state, has a good amount of neutral reviews online and gives you fair terms. You should always read your contract carefully to make sure everything is in order, and remember: You don’t have to borrow a loan you aren’t comfortable with.

Bottom line

A no credit check car loan may be a good option if you have nowhere else to turn and need a car, but it doesn’t hurt to see if you prequalify for a car loan with a better interest rate.

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