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MotorCulture
14-02-13, 10:04 PM
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How to Get a Car Loan with No Credit?

When you apply for a car loan, creditors will take a long, hard look at your credit history before they make a decision. This is a real problem for new car buyers because they havenít had much of a chance to build credit. Does that mean you canít buy a car? Not at all! There are a number of ways to get car financing through bad credit car loans. These solutions work if you have no credit or even if you have been bankrupt in the past.

Build Up Whatever Credit History You Can

For your credit score, even a short history of responsible behaviour is better than no history at all. If you donít have any credit cards or loans, apply for a credit card as soon as you can. There are cards specifically designed for Australians with no credit. They wonít have any perks and will probably charge a high interest rate, but they will build your credit history.

This gives you a chance to improve your credit score while you are looking for your car and will put you in much better shape when you do eventually apply for a loan.

Get Help from a Co-signer

You might not have any credit history, but what about one of your family members or close friends? You donít have to take out a car loan all by yourself; someone else can co-sign the loan. This way the loan decision will be based on both your credit history and the credit history of your co-signer. If you do decide to go this route, be extra vigilant about making your loan payments. Missed payments will damage your co-signerís credit history along with your own.

Save Up for a Down Payment

If you donít have any credit, itís going to be hard to qualify for a 100% car loan. Creditors would be a lot more likely to approve your financing if you can make a sizable down payment first. This makes your loan look less risky because itís for a smaller amount. It also makes you less likely to abandon your loan because youíve already invested a large sum of money into your car. If you can save up for about 10 to 20% of your future car purchase, your odds of approval increase.

Special Situation for Bankrupt Car Loans

Applying for a car loan after a bankruptcy is more difficult than applying with no credit history. In the past, you were unable to handle your financial commitments so creditors are going to be worried youíll make the same mistakes again. If you are applying after a bankruptcy, expect the requirements to be even firmer. Youíll need to rebuild your history, have more of a down payment saved up, or co-sign with someone that has an even stronger credit history.

To traverse this tricky situation, it helps to work with a loan expert. There are loan brokers that specialize in bankrupt car loans. Our professionals can help you plan your application and recommend where you should apply. While no one can guarantee youíll get a loan, this step greatly increases the chances of your loan being approved.

Applying for a loan with no credit or after a bankruptcy will be challenging, but itís a challenge you can overcome. Keep this in mind and be sure to focus on building your credit for the future so you never have to do all this work again. For more information contact Platinum Direct Bad Credit Specialists (http://www.platinumdirect.com.au/car-finance/bad-credit-car-loans) today.