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For anyone looking forward to getting the car of their dreams, seeking a car loan is an indispensable option. However, the going normally gets tough once your loan request is turned down due to a bad credit score. The following detailed write-up will be of great benefit to you if you’re looking for bad credit car loans.
Features of Car loans For People with Bad Credit
Interest Rates
Compared to ordinary car loans, these loans normally attract higher interest rates. Different lenders have different interest rates. It is hence very important for you to ensure that you shop around for the best deals in town. Try as much as possible not to borrow yourself into yet another debt. Other factors that affect the interest rates include the economic cycles and the number of players in the lending market.
Down Payment
Normally, you may be required to make a huge down payment before accessing these loans. Again as for this one you need to shop around for the smallest amount of down payment available within your locality. A big down payment might weaken your financial muscle thus making it a bit hard to furnish the new loan on time.
Repayment Period
Generally, these types of loans allow for a repayment period of up to 48 instalments. Though this duration is relatively shorter than for the ordinary loans, you can still learn to operate within the provided limits. As your credit score and your relationship with the lender improve, you can always negotiate for a longer repayment period.
Monthly Payments
The amount of monthly expenses is normally determined by the aforementioned factors. Basically, a high rate of interest rate and a short duration of repayment lead to higher monthly repayment amounts. However, you can get reprieve by creating a good relationship with your
Important Tips for securing car Loans with Bad Credit
If you’re looking forward towards owning your dream car through this form of financing, the following tips will indeed take you a long way.
Co-signer
One effective tip that works for people with bad credit ratings is looking for friends and family members with a good credit rating to co-sign for them. A co-signor acts as a guarantor thus raising your overall credit score. You’ll therefore be in a position to get a better deal.
Secured Loan
Another way to secure a good loan deal is by pledging your assets as collateral for the loan. It is important to remember that the asset(s) pledged can be repossessed by the lender in event of default on your part.
What other alternatives are available?
Apart from securing your car through the financial options discussed in this article, you can also explore the leasing option. This is a good alternative especially if you have a regular source of income but with a poor credit score. Through leasing, you’ll only be required to pay a monthly leasing fee for the car.
In summary, it is clear that there several alternatives that you can take if you want to get a car with a poor credit score. One of the most viable options worth considering for this financial venture is taking car loans for bad credit as discussed in this article.
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