No credit check car loans
If you’ve a bad credit rating, you certainly aren’t alone; many Australians have had credit difficulties at one time or another.
When banks and other traditional lenders turn you down after checking your credit rating, it's perfectly understandable to go looking for lenders offering no credit check car loans. However, in Australia, the National Consumer Credit Protection act requires lenders to loan money responsibly, so credit checks are required by all responsible lenders.
This doesn’t mean that you won’t be able to get a car loan, however. There are lenders who understand that bad credit situations happen, and also that in many cases it's no fault of the individual, but is instead due to unexpected circumstances. You may have lost your job or have unforeseen medical bills to pay. You may need a car to enable you to take a particular job, so it's worth exploring what could be available to you if your credit rating is poor.
How do no credit check loans work?
Traditional lenders, such as banks, will look at your credit rating after you have jumped through all the other hoops, and if they see it's bad, they are unlikely to offer you a car loan. While no credit check car loans aren’t valid options from many Australian lenders, there are car loans that can be tailored to an individual's specific needs, and could be available even if you have been bankrupt in the past. You will usually need to show evidence of income through your work and have a bank account, and a lender will then calculate how much it is prepared to let you borrow. After that, it's just the same as taking out a personal loan in that you will have to pay back the principal sum borrowed together with interest and, where necessary, any fees for setting up or managing the account.
Why do people use no credit check loans?
If you need a car loan but find the normal routes to borrowing are closed off to you because of your low credit rating, while it’s unlikely you’ll be able to responsibly apply for a no credit check car loan, there are alternative places to go. It doesn't mean you are guaranteed a loan, as this will depend on your circumstances, but it could be exactly what you need at what may be a difficult time.
What are the main features?
In common with any personal loan, you can do initial research into what is available online when it comes to bad credit car loans, as opposed to no credit check car loans. If you are eligible, you can make comparisons between interest rates, the length of time you will have to pay back the loan, and what fees, if any, are charged. These types of car loans usually have higher interest rates than standard car loans but if a lender is happy that you have the means to pay back what you've borrowed, they are more likely to make you an offer.
What are the pros and cons of no credit check car loans?
Having a bad credit rating isn't the end of the world when searching for a car loan, and while no credit check car loans aren’t usually valid options, there are alternatives to choose from. Be aware that interest rates, especially for short-term car loans, can be very high and that you should factor this in when you make car loan comparisons.