Buying a car is a step most working folks consider necessary. The need may arise also when one is a student, or as in most cases, a couple of months after getting into the field of employment. If this is the case, it’s impossible to pay the total amount for the car in one instant, and that is why there are so many car financing options. But even with this being the viable alternative, there is the problem of bad credit.
Having a low credit score means that you can expect some increased rates due to flawed payments in the past. But as society would have it, a considerable percentage of people willing to buy cars have bad credit reports, and that is what created the no credit check car financing alternative. Your credit score is unnecessary in this type of car financing, which is why those with bad credit are encouraged to apply.
It’s not all good news with having your credit play no part in acquiring car financing. For starters, you can be sure that your interest rates will be slightly higher. This is because your accountability is not 100%. You could try providing proof of a monthly paycheck which is big enough to cover for the car payments as well as other financial commitments one might have. That might convince the lender of your reliability.
Second thing you could do is offer collateral. In most cases, car financing relies on the car itself as the collateral, since if you default on payment, the car is taken away. However cars do depreciate in value and it might not suffice as collateral to warrant the lender to give lower interest rates. If you have other assets, you could offer them as collateral. Be careful the assets are something you can do without as there are significant risks in making this move.
As is expected, ensure that you do multiple comparisons from different lenders who offer car financing without pulling out your credit report. This will help get you the lender offering the best terms, with minimum risks. Ask around for free quotes, and read down the very essential details so that you make the best possible decision. Ensure you go for the repayment plan with the shortest repayment period that you can comfortably handle. You save this way, in contrast to going for a long repayment period with low monthly repayments.