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Are “no credit check auto loans” real?

'No credit check auto loans' and wishful thinking have something in common

No, of course they’re not. Santa Claus, the Easter Bunny, the Tooth Fairy: These things aren’t real either.  If you believe in these things or the websites that appear on your search-results page (and leave you wondering what in the world you’re reading) when you type “no credit check auto loans” in your search bar, you’re in luck. You just stumbled upon the truth: No lender – or at least no lender you should ever consider doing business with – will make a car loan without first running a credit check on the borrower.

How about “no credit auto loans?” Are they real?

Yes, it really is possible to get a car loan if you have no credit history at all. A car loan is one of the easiest kinds of credit to get. Not only can you get a car loan without an established credit history, you can get a car loan after a bankruptcy, a home foreclosure, a vehicle repossession, or a wage garnishment. You can get a car loan if you have bad credit as a result of late payments, debt charge-offs, or a high debt-to-income ratio.

Getting a loan with bad credit or no credit history is different, however,  from getting a loan without a credit check.  All reputable and trustworthy lenders base their lending decisions, in large part, on credit checks. Many lenders do not require a perfect credit score or a clean credit history, but every lender (or at least every lender that you should consider borrowing from) will run a credit check before they hand out money.

Getting a car loan is a good way to start building a credit history

Many times, a car is the first purchase a person makes on credit. That’s why it’s not unusual for lenders to specialize in loans for people without established credit histories. Unlike most personal loans, charge accounts and credit cards, car loans are secured. If you don’t pay as promised, the lender is entitled to repossess the collateral. Because an auto loan is secured and the borrower runs the risk of having to forfeit the car, an auto lender has an added measure of confidence that unsecured lenders do not share. Therefore, an auto loan can be easier to get than many other types of credit. Making payments on a car loan like clockwork is one of the best ways there is to start building credit.

Car Deal Expert finds the best no-credit auto loans

Loans for people without established credit are generally more expensive than loans for people with good credit, but to build a credit history you have to start somewhere. Although no-credit auto loans carry higher interest rates than other kinds of credit, the rates vary from lender to lender and it pays to shop around.

Online lenders offer the lowest interest rates for all types of car financing, including no-credit loans, and that’s where Car Deal Expert can help you save time and money. When you apply at Car Deal Expert, we instantly search through our network of lenders and put you in touch with the one offering the lowest interest rate for no-credit auto loans. It takes just a few minutes to apply, and there’s no cost or obligation. The decision to accept or decline any financing offered by the lender is entirely up to you.

Adding a cosigner to your loan may get you a lower interest rate

If you’ve never borrowed money before, an auto lender may require that you have a cosigner for your loan. Even if a lender will approve your application without a cosigner, adding a party with good credit to your loan documents can sometimes get you a better deal. When someone cosigns a loan for you, he or she is agreeing to pay the loan if you fail to do so. A cosigner gives the lender additional assurance that the loan will be paid, and the reduced risk of default is generally reflected in a more favorable interest rate.

An online preapproval makes it easy to compare dealer financing

Banks and credit unions rarely offer no-credit auto loans, but automobile dealerships sometimes do. Dealerships generally add mark-ups to the financing they offer, so their interest rates are rarely the lowest available. To make sure you get the best possible financing, apply for a loan preapproval at Car Deal Expert before you visit a dealership and then compare your online loan preapproval to the financing offered by the dealer.  Be sure to compare the figures (especially the number of payments, total of payments, and the annual percentage rate (APR)) on the lenders’ Truth-in-Lending statements.  Remember that a loan with a lower interest rate can end up costing much more than a loan with a higher interest rate if the number of payments is greater or if the lender’s APR includes other finance charges in addition to interest.

All lenders have minimum lending requirements

All lenders have minimum standards which the borrower must meet before a loan can be made.  There are online lenders who boldly claim (albeit in fatally broken English) that they never turn a loan applicant down, but what they really mean is that they never turn an applicant down if the applicant meets minimum lending requirements.  All lenders require that the borrower be an adult US citizen with valid a social security number.  Other minimum requirements can vary widely among lenders, but typical examples may include the following:

  • Time at current residence (anywhere from 30 days to six months)
  • Time at current employment (typically six months but possibly less)
  • Monthly income (typically $1500, but may vary from $800 to $2000)
  • No currently pending bankruptcy case (with possible exceptions)
  • No automobile repossessions (typically within the last 12 months)
  • Verifiable personal references
  • Valid driver’s license
  • Bank account in good standing
  • Maximum monthly payment amount (typically 18% of monthly income)

Maximize your chances of getting a no-credit loan

If you’re hoping to buy a car and you have little or no established credit, you can maximize your chances of getting a loan by applying right here at Car Deal Expert. Whether or not you qualify for a loan, rest assured that our application process is private and secure. Unlike those wishful-thinking websites that beat around the bush about “no credit check auto loans,” we won’t make unintelligible representations about loans without credit checks and we won’t make promises we can’t keep. We will, however, promise that even if you have no established credit history, we’ll make every effort to find you the best auto loan available, and we’ll do it very quickly.
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