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No Credit Car Loans - Buying Options For People With No Credit History
By: Carrie Reeder
Occasionally, having no credit history can be as bad as having a poor credit
history. Before granting credit, lenders need to gauge an applicant’s
creditworthiness. If you have no previous creditors, a prospective lender may
consider you a high risk and either deny a credit application or offer a high
interest rate. This applies to credit cards and automobile loans. Fortunately,
there are many options available to those hoping to obtain a vehicle loan with
no credit history.
Bad Credit and No Credit Auto Lenders
Automobile loans are different from other types of credit. If you have bad
credit or no credit history, getting a credit card or personal loan is
challenging. For the most part, these types of credits are unsecured. Hence, the
creditor suffers a loss if you are unable to repay the money.
On the other hand, automobile loans are secured. Thus, some lenders specialize
in bad credit or no credit car loans. In fact, auto loans are ideal for
establishing credit or rebuilding credit. Unfortunately, if you have never
financed a car, some lenders may charge higher fees. Here are a few tips to help
you get a low rate auto loan.
Establish Credit before Applying for Auto Loan
The easiest way to get a low rate on an auto loan is to establish credit before
applying. In some instances, lenders prefer applicants who have previously
financed a vehicle. If you repaid a previous car loan, or maintained regular
payments, lenders consider this a good sign. Hence, you may qualify for a low
rate.
If you have a superb credit rating, you may qualify for super low advertised
rates. Establishing a good credit history is easy. Within six months of opening
a new account and making regular on-time payments, your credit score will soar.
Use a Co-signer When Applying for Auto Loan
An additional approach involves obtaining a vehicle loan with a co-debtor. If
you are married, your spouse may act as a co-debtor. Moreover, young adults
trying to get an auto loan may have a parent co-sign for the loan. To qualify
for a low rate, the co-debtor must have good credit.
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View our recommended Poor Credit Car Loan lenders or view all of our Recommended Auto Finance Lenders Online.
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