Bad Credit Car Loans – Poor Credit Should Not Stop You from Owning a Car

2007-03-08 10:33:40

( Financial )



Getting a car loan in spite of bad credit is not really an extraordinary feat. Many financial institutions offer bad debt loans, which are precisely for people with bad credit. With bad credit car loans, a poor credit record will no longer hold you back from your dream of owning a car.

There are two basic ways to get a car loan even with poor credit. Borrowers can avail of either secured bad credit car loans or an unsecured bad credit car loans. The former requires property as collateral. Secured loans often have lower interest rates, smaller monthly payments and shorter repayment terms than unsecured loans. However, if you fail to repay a secured loan you will lose your property - a risk not present in unsecured loans.

You can work with car loan agents connected with several financing companies or direct car loan lenders. Both offer car loans to people with bad credit. In addition, there are car dealers who are willing to offer financing even if you have credit problems. Request several quotes and compare rates to find the best deal that meet your needs.

The downside to bad credit car loans is they usually have higher interest rates than standard auto loans as there is a bigger risk of delayed payments or non-payment when lending to a bad credit borrower.

Before approaching a lender, it will be good to determine first how much you can afford on monthly payments. If you are after lower monthly payments, you can get a long-term loan but the longer it takes you to repay the loan the higher the total interest cost. Try to find a short-term car loan with a monthly payment that you can afford.

After loan approval, you will receive a check with your car loan package. You can then start shopping for your car.


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