Each one of us in current times have a dream of buying a car. But not necessarily the road towards getting the car of ones dream is smooth and easy. Opportunity and hard work has enabled many people to secure their credit rating to the optimum and with a good credit score those people can easily obtain a car loan at affordable rates suiting their budget. However, this is not the case with all the people. There are many people who have never got a chance to build a long credit history just like students. Unemployment is a major issue in current times and with no employment people can hardly afford to use credit cards or obtain loans to repay the loan amount and build a good credit rating. That is why many lenders and banks have come out with no credit auto finance.
No credit auto finance is provided to people who havent had a chance to build their credit rating but would like to go ahead with establishing a credit score so that availing future loans doesnt become a problem. Lenders offer new or used car loans at low interest rates to people with good credit score but the same lenders are often hesitant to offer car loans for no credit. Hence, the lenders or banks have come up with strategies to finance that loan by offering high rate of interest on the car loan bad credit. All the lenders desire a customer with a good and long standing credit rating as their credit history is a proof that the customer has always been serious about repaying the loan amount taken for various purposes and have been successful in repaying the amount.
However, people with no credit history have the option of availing no credit auto finance or same day auto loan without any credit check when the urgency of getting the car is more. Used car loans come at a higher rate of interest and so it is advisable to prefer car loans for no credit on purchase of new cars as chances of negotiating ones interest rate increases while financing a new car.
The best way to build ones credit history is by getting many credit cards, purchasing items with the help of those credit cards and then paying off the amount on time. On time payment history of credit card bills will prove that the customer pays off all dues on a timely basis and will do so with the auto loan as well. Ensuring that you have a history of zero late payments and retaining your old credit account are also important ways of setting a good credit score. An individual opting for car loan bad credit can avail no credit auto finance with a co signer. In this case even if the customer does not have a credit history the lender will be assured that the co signer with a good credit rating is backing the investment and in case of default by the customer having no credit, the lender or bank can ask the co signer to take on the responsibility.
This is the same as with a used car loans and so having a co signer is always welcome to lenders who do not want any risk associated with offering car loan for no credit. Same day auto loans will also come in handy for people with no credit or bad credit as within 24 hours the auto loan will be approved but for getting same day auto loan a customer with no credit needs to show proof of employment and income so that the lenders know that the client has a stable source of income from where he will repay the loan.
Shelin Michel is a regular writer on Autodriver.com, a US based portal, which provides detailed information on Car Loan for No Credit and also share experiences regarding subprime auto lending.