The Advantages Of A No Credit Car Loan |
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Lenny Marie Conley
February 14, 2013
You've probably heard of bad credit car loans, and while these already make lenders that offer them sound very magnanimous, there is actually a type of loan that totally overlooks somebody's credit score: the no credit car loan. This loan option is still quite new, so not a lot of people are able to take advantage of it.
In today's economy, many financing institutions are expectedly more cautious about giving out loans, so people may find it more difficult to secure one these days. However, in spite of this natural reaction to the times, there also came about a breed of lenders that are astute enough to acknowledge that not all people with poor credit ratings are untrustworthy. Sometimes, circumstances beyond their control may have worked against them, and in reality, granting them a loan is not really the big risk that it may seem. Of course, at the end of the day, no credit car loans also present lenders with a ready market in those rejected by traditional financing agencies.
Those who offer this type of loan prefer to look at other aspects of your financial situation instead of your credit record. They know that excess income, for instance, has a far greater influence on your ability to make payments than your past behavior. To stand a higher chance of your loan being approved, you should be able to prove that you are gainfully employed. You should also be able to demonstrate your appreciation of limits. If you apply for a loan that seems too big, lenders will perceive that as a red flag.
Above all, you must realize that a loan is not a right, but a privilege. Even if lenders are not interested in your credit history, it does not mean that they would take you on faith alone. There are compromises involved, such as a down payment and higher interest rates. Ultimately, potential lenders may give you the benefit of the doubt, but they don't really know for sure what caused your poor credit score. There's still a chance that frivolous and indiscriminate spending led to your financial troubles, in which case they need to put in place some sort of measure to protect their investment and to compensate for that increased risk.
If you're one of countless Canadians who have fallen behind on their financial obligations, keep in mind that you still have options. Being granted a no credit car loan is actually a great opportunity for you to rebuild your credit score.