Qualifying for a car loan in the UK is extremely important for consumers. A car is a family’s lifeline to their surroundings, retreat and calm during a storm (family storm, although not quite as literal just as pressurised), not to mention the basic mode of transport for most. Millions of UK residents have no credit history, and each one of those people still needs to secure reliable transportation. The following are three ways car loans with no credit history are not as hard to get as you think.
Saving a Healthy Deposit
The best way to ensure that lenders are willing to work with a consumer on a car loan is to first build a healthy deposit. A consumer should build a first time deposit of approximately £1,000 to £2,000. The lender’s sense of security about the loan increases with the size of the deposit. The deposit ensure the lender that the purchaser is invested heavily in the deal. With a £2,000 deposit, a person who is new to the credit world is not likely to skip on payments and lose such a great deal of cash. A consumer can save a healthy deposit by working additional hours on a job, selling unneeded items within the home, or performing side jobs for local businesses and residents.
No Credit Specialists
A wealth of specialised UK finance companies exists. These companies focus on assisting people who have not yet established themselves with credit. Additionally, these types of organisations help people who have had troubled pasts with creditors. The application for such companies is usually brief and quick. Most people who apply are able to obtain a decision from the lender within one business day. To make sure the process goes smoothly, the applicant should have his or her monthly wage earnings and personal information on hand.
Secured Credit Cards as a Gateway
Secured credit cards may provide a gateway for a UK resident who has time to save money and work on his or her credit score before buying. A secured credit card is one that requires a cash deposit of £300 or more. The lender issues the credit card based on the initial deposit, rather than the consumer’s non-existent credit score. From there, the consumer is able to establish good credit by making timely payments on the account. After approximately six months of timely payment, the consumer will establish a record of positive payment history that he or she can use for a car loan.
The most important part of obtaining a car loan with no credit history is keeping the finance charges as low as possible. To ensure that one obtains the best deal possible, he or she should conduct comparisons on various lenders. Even before that, the consumer should conduct a personal finance profile inventory to establish a monthly payment figure that is within his or her achievable means. With the right resources and a positive attitude, a UK resident can have a reliable vehicle and a positive credit profile within months.