Can I get a No Credit Check Car Loan?
There are two types of car loans in Australia. These are secured or unsecured loans. A Secured car loan requires borrowers to present some form of property as collateral. The lender can confiscate or sell the property if the borrower fails to repay the loans. On the other hand, unsecured car loans don’t require property from borrowers for collateral. These loans don’t require any security, almost anyone can apply for them and are also known as bad credit car loans.
Advantages of No Credit Check Car Loans
The transaction involved is usually simple as lenders do not require any additional documents from the borrower. The process only requires the borrower to fill out and submit the application form. This could take only a few minutes. They need to provide valid identification along with the application form. Most transactions are done online with no faxing required. It usually only takes a phone call and an email exchange between the borrower and the lender.
The lender will contact the borrower after receiving the application. Borrowers will then be presented with a list of rates and policies. They need to review all the terms and conditions as well as the rates and repayment scheme before affixing their signature. Once both the lender and the borrower have come to an agreement, the approval will be given quickly. Some lenders give approvals in as fast as a few minutes.
Automatic Account Withdrawal
Most lenders require borrowers to give them access to their bank accounts. Lenders will directly withdraw the amount of every payment due. Borrowers won’t have to physically go to the lender’s office to repay the loan. This makes repayment convenient and easy.
Available to Almost Everyone
Almost everyone can get a no credit check car loan as there are only minimal requirements needed. Borrowers just have to present proof of identification along with the application form. Some lenders require additional documents, and borrowers can easily get another person to co-sign the agreement if they don’t possess them.
Good Credit Score after Repayment
These loans usually allot a long period of time for repayment. Successful repayment of the full loan can help improve the borrower’s credit score. This is a good start for those who have bad credit.
Disadvantages of a No Credit Check Car Loan
Higher Down Payment
The down payments are usually higher for no credit check auto loans. This is one of the security measures that lenders take with loans like this. The lenders don’t check the borrower’s credit score, but they usually require sizeable down payments to compensate for it.
Payment Deduction from Account
Although automatic account deduction is convenient for the borrower, it also has its own disadvantages. This will be a problem if the borrower’s account has no funds when the lender uses the check to get the amount due. Borrowers will have to pay additional fees and penalties to the bank when this happens.
High Interest Rates
Lenders usually provide no credit check cheap car loans with high interest rates. This is to make up for not checking the borrower’s credit history. Some lenders require large down payments while others require high interest rates instead. However, borrowers with bad credit scores choose to go for loans with high interest rates because they have a higher chance of getting an approval.
Length of Repayment
Cheap car loans usually come with lengthy repayment schemes. Lenders give borrowers from five to 10 years to repay the loan. Some borrowers may mistakenly consider long-term loans ideal without thinking of the results. Loans that are repaid for longer periods of time are actually more expensive. Borrowers have to pay overall amounts that are much higher than they would have with shorter repayment term loans.
Auto loans usually take a lot of time and effort from the borrower. This is why many people are choosing no credit check car loans these days. A no credit check loan is a good option for borrowers with bad credit scores because they won’t get denied based on their credit rating. Lenders won’t require documents such as bank account or credit card statements. There are many lenders that provide auto loans with no credit check. However, these loans also have their own advantages and disadvantages.
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Features and benefits
- Same day approvals for a faster response
- Low rates and flexible terms
- Independent advice from a Personal Advisor
- Pay a lower interest rate by using your car as security
- Fixed interest rate for the life of the loan
- Choose weekly, fortnightly or monthly repayments
Minimum requirements for bad credit loans, We cannot accept borrowers who are:
On a pension
Claiming youth allowance
Amy is a freelance writer and actor with a passion for the arts and new media. She has been writing in the financial spectrum for over 4 years, with experience writing both financial news and analysis and is well versed in numerous areas of finance such as home loans, savings accounts, credit cards, car loans and more. As well as being a regular contributor for Carloanworld.com.au, Amy’s articles have been published in the Sydney Morning Herald, News.com.au, ABC Online and CreditCard.com.au.You can find her on Google+