Business Finance

How to get a Car Loan with No Credit History?

Some ways can help you get a good deal on a car loan. Before proceeding with any loan, it is advisable to calculate the amount through Car Loan Calculator, Car Loan EMI Calculator and Car Loan Eligibility Calculator.

Some people live on a ‘No Credit, No Debt’ principle, while others enjoy credit facilities available in the market as they know how to manage credit and debts. Everyone in their lifetime comes across a situation where they think of availing a loan facility for the first time. Have you ever thought of getting a car loan with a good interest rate when you do not have any credit history? Getting a car loan without a credit history seems painful but NOT always. This short-read aims to enable you to understand how to get a good deal on a car loan with no credit history in the past.

1. Get Your Credit Score from Non-Traditional Credit Data

Even if you have never had any credit card or a loan before, it is possible to have your credit score. This is thanks to the models such as FICO that analyse the non-traditional credit data of an individual. Such non-traditional data includes your bank accounts, utility bills, rent or telephone bills. It is also advisable to use Car Loan Calculator, Car Loan EMI Calculator and Car Loan Eligibility Calculator to understand what amount you will get as a loan.

2. Choose the Best Lender that Has a Great Background or a History

The selection of the right lender is the most crucial aspect of the entire loan process. Once the best lender is selected and half of the work done already, the lender will take care of the rest of the work. Certain lenders do not calculate credit scores based on non-traditional data. Hence, it is imperative to choose wisely the lender once a proper background check is done.

3. Consider Getting a Co-Signer

A co-signer is a person who assures the lender that you will be paying your debts in time, and in case any default is made, he will be equally liable to pay off the debts. The main benefit of having a co-signer is that you will be able to ‘borrow’ money based on his credit history combined with yours.

4. Making Significant Down Payment may help You Build the Trust

When you pay a significantly higher amount as a down payment, the lenders consider it a gesture to pay off the rest of the loan seriously and on time. Usually, 20% of the original price is considered the standard amount to gain the lender’s trust, albeit the average rate had been lower than that.

5. Beware of Those Offering Loans without a Credit Check

If you check on the internet, there are plenty of such players who would claim that they do not need any credit history of yours and will be able to offer the loan instantly. However, in most cases, they recover huge amounts of interest, thereby providing a tempting offer.