Swedish lenders normally make use of credit investigations to verify a potential borrower’s identity, background, credit history and ability to pay. But what would happen if there is no credit check to speak of. Interestingly, there are actually car loans with no credit checks, and these are considered as some of the bästa billån i Sverige, and they offer a fair amount of advantages and disadvantages. If you’re interested, probably because you’re a new borrower or have a less-than-ideal credit rating, then it’s time you read about the positive and negative aspects of no credit check car loans.
Almost anyone can get one – What’s so great about no credit check car loans is that almost anyone can make use of it, as long as you can provide all the requirements. And if you don’t meet certain requirements, you can always get a co-signer—if you can find one, of course.
Quick and simple approval process – Since there’s no credit check, the approval process is very quick. Most of the time, you just need to fill up an application form and submit some identification. After that, the lender will just confirm if you are who you say you are.
Repayment could improve your credit rating – Completing the repayment of a no credit check car loan could improve your low credit rating because you were able to complete the term of a very long (i.e. five to ten year) loan.
High interest rates – To make up for the high risk in car loans with no credit checks, lenders normally ask for high interest rates. Some car dealers would offer low interest rates but offset this with a high down payment for the loan. The lenders usually approve interest rates at 9 to 10 percent, while car dealers place an additional 3 percent on top of this.
Sizable down payment – The down payments for car loans with no credit checks are usually large. This is part of the price you pay for the lender to not look at your history.
Take payments straight from your account – Sometimes, the lender might require that they be allowed to get your monthly payments directly from your checking account. Imagine the possible repercussion if there are no funds there when the lender decides to get the payment for that month.
Repayment length – Term length could stretch as long as ten years, which could turn your debt into an “upside-down” loan—a situation when the car loan’s balance is worth more than the actual value of the car. Terms stretching up to ten years put the loan in danger of going upside down.
Places asset at risk of repossession – No credit check car loans require collateral, usually in the form of a vehicle, a home or some other valuable asset. If you default, which is not implausible in this tough economy, you lose the asset.
Possible other expenses – You may be required to spend extra on insurance and extended warranty.