September 2nd, 2009 by MarryJoness
Getting aÂ car loans for bad creditÂ is possible. The downside is that bad credit applicants pay higher rates and fees. These higher rates may drastically increase monthly payments, which can affect how much you are able to afford. Nonetheless, bad creditÂ used car loansÂ are advantageous.
Poor Credit Auto Loans Help Rebuild Credit Car loans for Bad CreditÂ loans are ideal if you are hoping to rebuild your credit. A bad credit rating can affect the interest rate you receive on auto loans, credit cards, mortgages, etc. Moreover, a horrible credit rating may make it impossible for you to obtainÂ guaranteed auto loansÂ on everything.Most creditors are unwilling to grant money to individuals with a poor credit history.Â Car loansÂ lenders that work with bad credit applicants will take a chance because the loan is secured by the vehicle. If you default on the loan, they repossess the car.While you may receive a high interest rate with bad credit, if you strive to improve your credit, you may be able to refinance theÂ car loansÂ to obtain a lower rate. On average, lenders recommend you make regular payments for at least a year beforeÂ car refinancing. Prior to refinancing, obtain a copy of your credit report. If your credit rating is still low, refinancing is not a smart move.
Poor Credit Auto Loan Following a BankruptcyBad creditÂ guaranteed car loanÂ is perfect if you have recently filed for bankruptcy. In order to re-establish credit, it is recommended that you open three to four new credit accounts. Because traditional lenders will not offer you a loan, obtaining a bad creditÂ used car loanÂ after a bankruptcy is your best option. Once you have established a good payment history, this will reflect on your credit report, thus opening the door for betterÂ used car financingÂ packages.
How to Obtain the Best Poor Credit Auto Loan?
While bad creditÂ new car loansÂ traditionally carry a high interest rate, this does not mean you should accept the first offer you receive. By comparing quotes from several lenders, you are able to obtain the best rates and terms. Completing an online application with aÂ car loansÂ lender is quick and convenient. Moreover, you can obtain multiple offers from various lenders.
If you enjoyed this post, make sure you subscribe to my RSS feed!
This entry was posted on Wednesday, September 2nd, 2009 at 2:34 pm and is filed under Financial Planning. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.