You’re young, and you’ve been working on your own for a few years. Your parents gave you an old car of theirs for your first car, but now it’s dead. You need a new car. However, you also have no credit because you’ve been nervous to get a credit card. You can’t afford to pay for a car in full, but can you get financing? Some dealers sell bad credit no credit cars in San Antonio TX and other cities. This could be a good option for you to get your next car.
Bad Credit
When dealers refer to credit, they’re referring to your credit scores. Credit scores are a reflection of how much money you’ve borrowed and how you payed it off. The better you are at borrowing money and paying it off, the better your score. However, when people miss payments or fail to pay back loans, their score drops. Credit serves as proof that you can actually pay back a loan if they give it to you. No credit is essentially the same as bad credit, because there’s no proof that you can pay back a loan.
High Interest Loans
Bad credit or no credit dealers give you a loan if you have a steady income. Since you’ve been working, you have that piece of proof that you have the ability to make the payments on a loan. Since you don’t have proof that you follow through with applying that income to payments, you’re still a slightly high risk. That high risk is reflected in the loan as high interest so the dealer can cover their back.
Refinancing
If you find a dealer that doesn’t charge a penalty for paying off the loan early, you can build your credit and refinance the loan with a lower interest rate. That means that once you have the credit necessary to get a loan with a low interest rate, you get one from someone else. Using that lower interest rate loan, you can pay off the high interest rate loan. Then you pay less interest in the long run.
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