Posts tagged: auto loans with no credit check

No Credit Auto Loans

I didn’t buy my first car until I was 21 years old, and I didn’t have enough money to pay cash. That meant going to my parents’ credit union and trying to qualify for a car loan. I did have some credit established at the time, but not enough for the credit union to feel comfortable giving me a no credit auto loan. My parents had to co-sign on the loan.

But what if you don’t have parents (or some other relative) that can co-sign on your loan? Will you be able to find a lender who offers no credit check auto loans? It won’t be easy, but if you can find the right bank, you better be ready for some ‘creative’ financing.

Most of the time these kinds of car loans are going to be offered at the dealerships themselves. You’ve probably seen signs waving outside used car lots all over the city where you live screaming ‘no credit? no problem!’ They’ll lend you the money alright, but it’s going to come at a price.

I used to have a friend whose family got into the used car business and I got to watch closely how they operated. None of the people they sold cars to would be considered traditional or A-class borrowers. These were people that no bank or credit union was going to touch. My friend and his family regularly gave people loans to buy cars and charged them upwards of 21% interest. Can you imagine paying credit card interest rates on a car loan? Well, if you need no credit check auto loans with repo that’s what you’re going to be up against.

The only advice I can really offer is to look long and hard for a person who could co-sign your loan. It will probably be the difference between paying double-digit interest and paying in the neighborhood of 7% interest.

This is a loan you’re probably going to have for three to five years, and that big of a difference in the interest rate will save you hundreds and hundreds of dollars.