An excellent credit score has its share of benefits while applying for a car loan. However, the lender's approval can be a little terrifying when you don't have any credit history, which is a zero credit score, as you haven't applied for a loan or a credit card in the past. There's still good news that you can still have a car loan though you don't have a credit history or a low one.
One can take the following actions to get a car loan with no credit score.
Prove your income can support EMI payments
Major banks consider other factors, like current salary or income, with your credit score. If you have zero credit score, you can still opt for a car loan by presenting the latest statements, which display information like increment in your salary, annual bonus, or other additional income sources. This will prove that you are financially sound and refund your loan on time. This will help you in getting approval speedily.
Present records of repayments of your existing bills
Your credit score is based on the timely refund of your ongoing debts. Thus, if you want to get a car loan without having any credit history, you can present records of timely payments on all the outstanding debts such as credit cards, loan EMIs and utility bills. This will be beneficial in enhancing your chances of getting your loan approved.
Apply for a loan from an NBFC
If you are someone with no credit score, you can quickly secure a car loan from an NBFC because they have more relaxed policies regarding customers with low or no credit scores than traditional lenders. An important thing to note here is that the interest rate charged by NBFCs is higher than what banks offer. You have to take a smart move after considering all the other essential facets.
Opt for a low car loan amount
The lender may see you as a risky customer if you borrow a tremendous amount of money without any credit score. You can go for a lower amount and repay it consistently to develop a higher credit score. This will gain the lender's trust in your creditworthiness, and then you can ask for a loan of a much higher amount. Also, repayment of a lower amount will be more manageable in your pocket without affecting your present finances.
Get a guarantor or apply for a joint loan.
If you are a beginner to this credit system having zero credit history, you can get a co-applicant or a guarantor to get the fast approval for your car loan. Ensure that the guarantor has a good credit history or a good credit history. This will bend the lender towards you and have a good deal.
Apply for a secured loan
Another simple way to avail a car loan is to apply for some collateral to secure the loan repayment. Gold jewellery, private property, fixed deposits, or other valuable assets could be your collateral.
Build your credit score
If you do not need a vehicle right now, you can wait and use that time to establish a solid credit history. Focusing on building your credit score can help to lower potential interest rates and save you money in the long run.
Conclusion
You can easily manage some hacks in no credit check car loans or no credit check car finance. If you have more queries, contact Freedom Cars right now!
Source URL: https://www.freedomcars.com.au/franchising
