In House Financing Options & Alternatives

A no credit check car loan is a loan that doesn't require any kind of credit history and doesn't rely on a FICO score in order to be approved. In many parts of the country, this type of loan is called a "buy here, pay here" or "tote the note" loan. Since the lender doesn't check your credit, you are automatically approved for a car loan. Sounds great, doesn't it?

At this point you may be thinking "what's the catch?" Since we all know that there is no free lunch, there are a number of things to consider before you take out one of these loans:

  • You are not borrowing money from a bank, but from the car dealer. The dealer holds the title to the car and you will be making payments on a weekly, bi-weekly, or monthly basis to the dealer, at the dealership.
  • The down payment will be high. In order to stay in business, the car dealer will require a down payment probably equal to the cost of the car (to cover losses in case the borrower skips town before the first payment is due)
  • The interest rate will be high. Interest rates on these types of loans start at 25% and go up from there.
  • The car will be an older used car. If you're lucky it will be reliable. If not, you will be paying repair costs in addition to your monthly payment. If you fail to make the payment, the car will be repossessed and you will still have to make the remaining payments per the loan agreement that you signed.
  • Even if you make your payments on time, your positive payment history will probably not be reported to the credit bureaus - it's too much work for most dealers.

In the end, a no credit check car loan accomplishes very little, especially if you are serious about reestablishing your credit. A more constructive course is to use one of the legitimate buy car bad credit web sites that will direct you to a dealer that specializes in helping customers reestablish their credit through a bad credit car loan with a lender that reports to all the credit bureaus. By visiting one of these web sites and filling out an online buy car bad credit loan request form in the comfort and privacy of your home, you can begin your quest for a higher credit score.

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