No Credit Check Car Loan NZ
No Credit Check Car Loans NZ
- What is a no credit check car loan?
- Can I get a no credit check car loan in NZ?
- No credit check car loan interest and fees
- What are my options for car finance with no credit history?
- Can I get car finance with bad credit?
- How can I prepare for applying for car finance with bad credit?
Don’t have any credit history in New Zealand or have bad credit? We’ve done the research on no credit check car loans to help you understand what they are and who could get one.
What is a no credit check car loan?
A no credit check car loan is where a person applies for a car loan and the lender does not perform a credit check to see their credit history. The persons current financial situation is assessed and their affordability measured.
A persons affordability is their income minus expenses, which gives the lender an idea on how much disposable income the person has and whether they could make their repayments regularly.
A no credit check car loan is more a snapshot of your current financial situation than an assessment of your financial history.
Can I get a no credit check car loan in NZ?
At the time of writing we could not find a reputable car finance lender who offer no credit check car loans in New Zealand. The closest and definitely not recommended no credit check loans are Payday loans which are short term loans with huge interest rates sometimes up to 50% of the loan amount.
It really depends on your personal situation and why you are wanting a no credit check car loan as to whether you can get one and if you should get one.
Are you wanting a no credit check car loan because you don’t have any credit history or because you have bad credit?
If its because of bad credit history, you should really consider other options because no credit check car loan interest rates are generally much higher and you could find yourself in more financial difficulty should you get approved for one.
No credit check car loan interest and fees
Because a no credit check car loan is considered higher risk you will likely pay a larger loan establishment fee and also a higher interest rate.
There could also be further restrictions on what kind of car you can buy, the total loan amount and even where you purchase the vehicle from.
A no credit check car loan can often be unaffordable and you will end up paying far above the normal purchase price of a vehicle so in most cases is probably not the best option.
Compare Car Finance would not advise to proceed with a no credit check car loan because of the additional expenses included which could put you in financial hardship and if your repayments cannot be made you could lose your car (and still owe the loan amount).
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What are my options for car finance with no credit history?
Having no credit history can make it harder to secure car finance, especially car finance at a low interest rate.
A credit check is used as a way to measure how responsible you are with money and assess the amount of risk involved in loaning you money so without any credit history there is no way to measure your financial past.
So because you have no credit history, you are actually added to the poor-average credit list because of the lack of information about how you manage your money.
You could use a co-signer to help secure car finance with no credit history. You need to select the right person for this role and know if for some reason you are unable to make your repayments, the co-signer will be liable and this can put immense strain on relationships.
If you have time on your side before purchasing a new vehicle on finance, you can start building your credit history with utility bills in your name, paying a credit card in full every month on time etc. Don’t opt for payday loans or quick finance options as they don’t project good money management.
There are many companies in New Zealand who offer bad credit car finance which is unfortunately where you should start. Shop around and see who can offer you the best rate. Some lenders will take your no credit situation better than others so make sure you get 2-4 quotes from different types of lenders.
Can I get car finance with bad credit?
As mentioned above there are plenty of lenders in New Zealand who will consider loaning you money even with bad credit. The key thing for you to consider are the interest rate and establishment fees which will be higher than vehicle finance for someone who has good credit.
Depending on your financial struggles in the past and reasons for your bad credit history you should really ask yourself if purchasing a car on finance is a good idea for your situation.
So the question may not be can I get car finance, but should I get car finance. You’ll need a steady income that exceeds your weekly/monthly expenses. You will also need to take into consideration car insurance, new tyres, registration and any unexpected bills (household bills or vehicle expenses) that arise.
If your car finance is a secured loan you’ll need to make your repayments regularly to avoid repossession which would leave you with no car and possibly a loan amount still owing. Repossession can be a costly exercise and generally happens because the applicant did not assess their repayments and income correctly.
How can I prepare for applying for car finance with bad credit?
If you have considered your personal financial situation and think you are in the position to take out a loan and make your repayments and you have bad credit, there’s a few things that you can do to give yourself a better chance at securing the loan and to get yourself a better loan interest rate.
- Check your credit history and make sure there are no outstanding debts. You can also dispute any unexpected defaults you deem are incorrect.
- Save save save! Get yourself a deposit so you can show you have disposable income and can manage your money well enough to take out a loan.
- When you apply you will be required to show 3 months bank statements. Ensure these bank statements are in great condition. Limit your spending and show the lender you’re not a risk.
- If you have time on your side, take it! The longer you can prepare for your car finance application the better your position will be. Aim to save and super charge your bank statements for at least 3 months to give yourself the best shot at approval.
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