No Credit Check Car Loans
Compare no credit check car loans
Many people are put off from applying for loans by the thought that a failed application could harm their credit score. This is because when you apply for a loan, lenders will generally perform a credit check which may be recorded on your credit file for other lenders to see.
However, there are actually two forms of credit check lenders can carry out, commonly known as a “soft search” and a “hard search”. Soft searches allow lenders to see key information from your credit history but without leaving a record of the search behind for other lenders to see.
Many lenders will now carry out a soft search initially to see if you are likely to qualify for a loan with them. They can also use this to give you an idea of the kind of interest rate you are likely to get. This allows you to get quotes from various providers, giving you more choice without affecting your credit score.
If you decide to proceed with a loan application, the lender will then usually carry out a hard credit search. However, by using soft searches to narrow down which lenders are most likely to approve you and what deals they are likely to offer, you massively increase your chances of being accepted by your first choice loan provider. This means you are likely to end up with fewer hard searches on your file, protecting your credit score.
There are two main types of car loan you may be able to apply for where many providers offer an initial soft check before moving ahead with your application.
Personal unsecured car loans with no credit check
If you need to borrow between £1,000 and £25,000, a personal unsecured loan may be the best choice. Many of the top providers do not require a hard credit check before making you an offer and the application process is usually fast – some lenders will even offer instant decisions.
Interest rates on unsecured loans tend to be fixed for the lifetime of the loan, but the exact rate you get will depend on various factors, including your credit score. Being able to compare deals from different providers without damaging your credit score makes it much easier to get a good deal.
If you decide to go ahead with an unsecured car loan, it is important to keep up-to-date with your repayments. Failure to do so is likely to damage your credit score and may even result in a county court appointing a bailiff to recover the debt.
Homeowner secured car loans with no credit check
Property owners may be able to get a better deal on their interest rate and borrow more over a longer period by using their home as collateral for a secured loan. This type of borrowing is most common for loans over £25,000 and, again, many providers will make an offer without a hard credit check.
The interest rate you are offered will depend on your credit score and other factors, including your loan-to-value (LTV) ratio. LTV is determined by comparing the total amount you wish to borrow against your home (including existing debt, such as a mortgage) versus the market value of your property. The lower your LTV, the better interest rate you are likely to be offered.
Taking out a loan secured against your home can be a cost-effective way to borrow, but also carries risks. If you default on your loan you could be required to sell your home to pay off the balance.
Get the best rates on car loans with no credit check
Finding out which lenders offer car loans without needing an initial hard credit search can require a lot of time and effort. Our free car loan calculator takes the hassle out of the process for you, allowing you to swiftly compare the best deals from across the market. Simply scroll to the top of the page to try it out.