Personal Finance

No Credit Car Loans - Tips for Financing Your Car with Zero Credit History

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Thinking as how to get better interest rates than what is being offered to you especially when you have no credit score to bail you out? Getting a car loan with no credit is not an impossible work, but a tedious task to undertake. You have a disadvantage on which you have to work to make it your strength by some means.

One of the initial steps will be to find as many lenders as possible. And I am not talking of financial institutions or banks because most of them will not like to deal with you. The reason is simple - you have no credit rating. Not having credit rating is not a crime, it just increases the risk. So the traditional financial institutions are afraid to take that risk as it involves an uncertainty of default on loan. Hence we are aiming at those institutions, banks, credit unions, lenders and dealers who are offering the no credit vehicle loan services.

These lenders are willing to take the risk and so they expect a reward. They will offer no credit auto loan at a higher rate of interest than the usual loans. Are you hesitant about the no credit automobile loan after seeing the rates? Do not be alarmed because you have to keep in mind that they are practically taking the risk to finance regardless of your credit history. When you come across such high rates, do not get upset. Instead use your negotiation skills. You can actually bring down the higher rates of the interest offered by the lender by showing your positive points such as your income or paying down payment.

In no credit auto loans, collateral plays an important role. In car financing, the car is part of your collateral. The lenders who are offering no credit auto loan may ask you to put down additional collateral and sometimes ask for a co-signer. The additional collateral should be such that it covers the value of the loan and its interest. They trend to ask for additional collateral comes from the conception that the value of the car depreciate with time. The collateral can be anything from a house, land or another vehicle you may have.

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However, it might be that you do not possess collateral. Even then you can avail no credit vehicle loan if you are employed and have regular source of income. Your employment history, amount of income, investments made, etc will come into forefront. Lenders may actually go through the process of checking this information to satisfy them. Your annual salary for the previous year will be looked into because your annual income will be one of the deciding factors. You will have to keep your patience and go through all the paper work if you want to secure no credit car loans.

Once your paper work is over and the no credit auto loan gets approved, visit the dealer of your choice to get that dream car of yours.