What Are No Credit Car Loans?
A few decades ago, no credit car loans were frustratingly hard to find. In fact, if you don’t have any credit, it would be difficult for you to buy anything substantial in your life.
In America today, and elsewhere in the globe, having credit signifies your credibility and reliability as a consumer. Having good credit helps you grab great employment, find housing (whether you’re buying or renting), and lends you buyer protection, among so many others.
But not everyone enjoys that. New graduates, young professionals and stay-at-home housewives rarely do. However, they need vehicles to transport them from one place to another.
Thank goodness there are various financial agencies and even car dealerships offering no credit car loans these days. However, they will require a lot of documentation from you so you need to be prepared for that. Here are those which you will need:
Down Payment for the Vehicle
All car dealers will ask for a down payment for the car that you’re looking to buy – whether that’s brand new or used. Here’s one great tip for car buyers: it is very important that you save up for more than what is required of you so that you’ll pay lower monthly dues.
Other Pertinent Documentation
Because you have no credit, these dealers offering no credit car loans will verify your ability to afford the car through other places. You need to substantiate your paying history by giving them a copy of the following:
Your bank statement that will confirm that you have an account and that it is in good standing. The documentation of utility bills (telephone, electricity, water, etc.) will assure them that you pay on time. Finally, your proof of employment will comfort them that you have money to pay. For the last one, you could provide them with multiple pay stubs.
A Co-Signer May Be Necessary
Another great way to be approved for those no credit car loans is to ask a family member or a close friend to be a co-signer. This person should have good credit rating since you don’t have it at all.
One important note here: pay your dues on time. If you keep missing your monthly payments, your co-signers credit will suffer. And if you miss it completely, your relationship with that co-signer may also crumble because, more often than not, lenders will go after the one with the good credit history than the one without it.
Start Building Your Credit
We cannot emphasize enough the importance of having credit and the significance of building that to be appealing to credit bureaus. But it is also understandable if you do not have one yet. Just make sure that you have one soon.
Get a credit card as soon as possible. It is tempting to spend with a plastic but you’ll just have to be careful with your shopping habits. Buy what you can afford. Live within your means.
While there are numerous companies offering no credit car loans these days, it would be more advantageous for you if you start building you credit as soon as possible.