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Pros and Cons of No Money Down Financing

Pros and Cons of No Money Down Financing

‘No money down financing’ is getting a loan without down payment. Generally, when you purchase the car or any big-ticket item on financing, you have to pay some amount as the down payment and rest is converted into the installments.

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With no money down financing, you will overcome the difficulty of the down payment but this option is available only for the people with good credit score. For the people suffering from bad credit score, bad credit car sales dealer work best. This is because no money down lenders follows strict regulation for approving loans.

No money down financing have both pros and cons. Let have a look at it:


  • With no money down you don’t have to spend your cash reserve. It allows you to the use your cash for other purposes.
  • You can easily buy the things without investing a lot. With no money, you overcome the hurdle of the down payments which inspires you to make a purchase.

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  • Interest rates are little higher with no money down financing. You can borrow loans from car dealerships that work with bad credit for cheaper interest rates.    
  • Because of the large principal loan amount, monthly installments are large. You can easily go upside down with no money down financing because after some time you might owe more than the worth of your car.  

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Borrowing money using no money down financing is not the best option for everyone. If you can pay the monthly installment on time, no doubt no money down financing is the right choice for you. But, if you are struggling to make your monthly expenses than other financing alternatives will work best for you.  

You can also click here to know more about the no money down financing.     

About Charlie Lamaro