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
The Definitive Guide to Car Loans Without Credit Checks
Ever thought you couldn’t apply for a loan because you’ve got bad credit history? If you have, now’s the time we prove you wrong.
No credit check loans offer a great opportunity for you to improve your credit score if you are genuinely willing and able to repay your loans. Perhaps you don’t have a strong enough credit history to apply for a loan, but still have sound financial prospects over the coming years. Alternatively, you might be self-employed or a temporary resident of Australia, meaning your access to credit is lessened. In these cases, no credit check car loans provide a great option for borrowing money when you need it most. The loans we have on offer here at Car Loan World could be the perfect option for you.
In this definitive guide, we will go through the basics of car loans for people with bad credit history, and what they mean for you. We’ll cover:
- the fundamentals of loans and interest repayment;
- the basics of credit checking;
- the plans for no credit check car loans available to you here at Car Loan World.
What is a loan, and what is interest?
A loan is, put simply, money that you borrow from someone else. You might be buying a house or a car, or investing in a new business. If you don’t have enough funds for your purchase or business operations, you can ask for money to be repaid at a later date. In almost all cases, the money you are lent will be repaid with interest. Interest is the safeguard that the lender requests for giving you their money, which acts as an incentive for you to repay the loan sooner rather than later.
For example: let’s say you want to buy a car which costs $20,000, but you only have $10,000 (also known as your equity). You might go to Car Loan World for a $10,000 loan, to be repaid with 5% interest annually over a 3-year period. You will get the $10,000 upfront, pay for your car, and then repay the debt of $10,000 over the next three years, plus $500 each year that you are repaying the loan: in effect, $1,500 of interest.
If you’re any good at maths, you’ll notice that the larger your down payment, and the less time you spend repaying the debt, the less you’ll pay overall on interest. Often, loans will be required to be secured by an asset, meaning that if the debtor defaults on the loan, the asset would be sacrificed as payment.
What is credit, and what is a credit check?
Credit is the agreement that a debtor will repay a lender’s loan, based on a trust in the debtor’s abilities to do so. Understanding credit is best achieved through similar terms: think of the last time someone asked for your credentials when you applied for a job. They were asking for evidence that you were qualified to do it. Or the amount of “street cred” you have: how cool or respectable you are on the streets. In finance, credit refers to the respect, trust, or evidence that you can repay loans to a lender (also referred to as a creditor).
A credit check is an assessment of a debtor’s likelihood to repay their loan. A credit check generates a credit report and credit score of between 0 and 1000. It essentially answers the questions: “what are the debtor’s credentials?”, and “how much street cred does this debtor have?”, with respect to their financial credit history. While each agency will apply different metrics, credit histories usually account for these primary factors:
- Payment history. If you make payments and repay debts on time, you will have a good payment history. If you regularly max out your credit card or miss the due date on your bills, you’ll have a relatively poor payment history.
- Your current debts. This is determined by the number of debts you have on other loans, and the proportion of your loans compared to the amount of credit you have available. The lower your debts, the better your credit score.
- The length of your credit history. If you’ve been repaying loans well for several years, you will have a better credit history.
- Your account portfolio. Diversified accounts, such as a mix of home loans, car loans, and credit cards, are seen more favourably when applying for loans, as they provide evidence of repaying debt in a number of arenas.
- Your recent credit activity. If you’ve had consistency in your accounts and loan repayment, and that hasn’t changed recently, you will have a better credit score.
What is a no credit check car loan?
A no credit check loan, also called a bad credit loan, is a loan issued by a creditor which doesn’t involve checks for credit history. This is a great option for people who haven’t got significant credit history, or have only recently started applying for loans. Perhaps you’ve recently started earning significantly more income than you used to, and so have until now been unable to repay larger loans.
Car Loan World’s No Credit Check Car Loans
Car Loan World understands that credit history isn’t everything; people have a range of circumstances which affect their ability to access credit. To accommodate this, Car Loan World offers a wide range of no credit check car loans. Car loans from $5,000 to $30,000 are available Australia-wide, except in some remote areas, and up to 100% of the car’s value is available for borrowing. Instead of looking at credit history, debtors only require two things: firstly, a registered motor vehicle no older than eleven years (it can be the vehicle you’re buying) to secure against the loan; secondly, regular income payments to service it. The bulk of this income must come from wages, with payments from Centrelink taken into account.
If you’ve got bad credit history, but good financial prospects, Car Loan World is the place for you. Take a look at our range of no credit check car loans to find out more, and get a quote today. Happy car hunting!
FAQs: What is a credit check?
A credit check is an assessment of your likelihood to repay a loan based on your history of doing so. It takes into account a number of different factors, including your payment history, current debts and recent credit activity.
FAQs: What is no credit check car loan?
A no credit check car loan enables you to apply for loans without a credit check, a great option for people with good financial stability but poor credit history. These people include those who are self-employed, temporary Australian residents, or have only recently started applying for loans.
FAQs: Where can I find the best bad credit history car loans?
Car Loan World offers a wide range of car loans for people with bad credit history.
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+