You may have seen lenders promoting ‘No Credit Check Car Loans, and Guaranteed Approval, but is this really true? Or is this another marketing ploy? Let’s find out!
If you're searching for a No Credit Check Loan with Guaranteed Approval, chances are, you're trying to avoid getting dinged for too many credit pulls, or you have bad credit and want to get approved. While it is possible, it's important to know that for every credible offer, there are another 10 sharks waiting to take advantage of your situation.
When you apply for a loan, whether it be a student loan, credit card, auto loan, or mortgage, you consent to have your credit report checked by a lender.
When a lender pulls a copy of your credit file to see if you’re eligible for a loan, it’s called a hard pull, and they’re checking your credit history to see if you’d be a respectable candidate for the loan that you’ve applied for.
This means that they want to ensure you’ve got a good handle on your finances and that you can afford to pay back your loan. Otherwise, you’re viewed as a risk to lenders, and one of two things will most likely happen:
- your interest rates will rise,
- or you might not be approved for the loan altogether.
As an auto financing company, Canada Drives has consulted with Canadians who are curious about getting a car loan without having to get their credit checked. Although this is possible through some third-party lending institutions, these lenders, who promise no credit checks for a car loan, drastically increase interest rates or will prolong the length of the overall term, with higher monthly payments.
With third-party lenders who don’t check your credit for a car loan, you’re likely to pay thousands of dollars more than what you would if you were to apply for a car loan with a credit check. If you’re hoping to get a new car loan without having to consent to a credit check, remember the following tips before you start to inquire with a lending institution that promises no credit checks with “guaranteed” approval.
You Can Get a Car Loan with Bad Credit or No Credit
Often, people who search for no credit check car loans are hoping to avoid high-interest rates due to their already poor credit. Or they’re afraid that a hard pull to their credit report could damage their score. It’s easier now more than ever to get approved for a car loan with great rates, regardless of your credit situation. Today, most lenders in Canada specialize in helping applicants who have low or no credit score, and Canada Drives partners with the majority of them.
Canada Drives also partners with hundreds of car dealerships in Canada that can help people with all types of credit scores get driving in vehicles with affordable monthly payments and low interest rates. With tons of new lenders on the market ready to help those suffering with their credit, the hard pull might be worth the few points lost as you’d be saving a ton of money down the road compared to no credit check car loans.
Auto Loan Credit Inquiries Can be Bundled
What a lot of people don’t understand is that credit checks for auto loans can be bundled. This means that you can inquire with lenders regarding different financing rates within a short period of time so that your credit score doesn’t suffer. Typically, when you apply for a lot of different loans within a short period of time, your credit score will drop a few points. Although this is true when applying for multiple different kinds of credit at once... If you’re applying for just a car loan, there is a rate-shopping window that lets you shop around for financing deals to ensure that you’re finding the best rate available, without your credit history being damaged.
Equifax’s rate-shopping window for an auto loan is within a 14-day period. This means that any hard inquiries made from auto loan applications within 14 days won’t have a negative impact on your credit score, as loans shopped between this time will be taken as a single inquiry. The shorter the period of time that you’re shopping for auto financing, the more likely your credit will avoid a big hit. Although credit inquiries can lower your overall credit score a few points, they will gradually decrease over the course of a couple years, and if you’re bundling your credit inquiries, you’ll have fewer hard-pulls to deal with.
Canada Drives works with thousands of Canadians every day, ensuring they get quality vehicles with ease and simplicity, regardless of their credit score. Getting approved for auto financing with bad credit can take several days, and even weeks, but Canada Drives’ dealer partners work hard to get applicants the best vehicle and financing options fast. If you need an affordable vehicle and want to rebuild your credit, apply with Canada Drives for free today and learn more!