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No Credit Check Car Option: Learn how to get a car without a good credit score!

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First Car Loans: Learn how to get your first car loan!

No Credit Check Car Option

 

                         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.

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Advantages of No Credit Check Car Options

Simple Process

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.

Fast Approval

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

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 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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Financing Your First Car

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Thinking about how you're going to pay for your first car?

How much should I spend?


Before deciding how much to spend on your first car, decide what you can afford. Answering these questions is a good start.


•    What are the running costs you will need to budget for? A medium-sized car would be about $200 per week* in fuel, repairs and servicing.


•    What is the gap between your savings and the cost of getting the car on the road? Check out Costs to budget for when buying a car if you're not sure.


•    If you borrowed the gap, what would the finance repayments be? 

Then do a budget to see how these costs fit in with your other expenses.
If you have your dream car in mind and know how much you want to spend, answering these questions could still give you a better idea of what financial commitment you're taking on.

TIP: You won't make a return on the money you invest in buying a car. Think about your other priorities and consider how much of your money you want to tie up in an asset that drops in value, rather than increases.

When should I organise car finance?


If you're ready to buy a car and are organising car finance for the first time, consider getting Conditional Approval before you start kicking tires. That way you'll know in advance if there are going to be any problems with your finance rather than getting caught out after you've put down a deposit.


Conditional Approval usually lasts for 30 days so you have some time to shop around for the right car.

If you're not ready to apply for finance but are shopping around for a car, make sure you:
•    Are aware of typical loan interest rates,
•    Know what you can afford in repayments, and
•    Have a good sense of your likelihood of being approved for finance

What finance options are available?


You're probably considering a car loan or a personal loan. They are very similar products, however, a car loan uses the car you're buying as security for the loan. This typically reduces the annual interest rate charged, however, there are usually some conditions for the car to be eligible - for example, it may have to be above a certain value or below a certain age.

Getting a longer loan term can be a way to reduce the regular repayments you have to make to service the loan, however, make sure you look into any penalties that might exist for paying out the loan early.

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