Tag Archives: Auto Loan

Auto Bad Credit – Get the Auto Loan You Deserve

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Auto bad credit no longer has to stop you from getting the new or pre-owned vehicle you deserve. Our country is set up to give second chances to those who have no credit or bad credit.

Fact is many of us especially in this economy have taken hits to our credit giving us problems when it comes to auto loans. Regardless is you have no credit or bad credit you can easily obtain the auto loan you need to purchase the vehicle you want, but you need to be careful.

As much as our country wants to give second chances there are people and auto loan companies out there that can care less about your problems and look at them as opportunity for gain in their own pocket.

Yes those who have no credit or bad credit will pay higher interest rates. There are some finance companies who are partnered with car dealerships and while this may seem to be an advantage to you, it could cost you a lot more money than necessary.

There are many reputable financing companies who work specifically with auto bad credit financing. They will give you the loan you deserve and be fair with their agreement with you. There are also many companies who will take advantage of you, your credit and their agreement for an auto loan.

The problem many times is that those with bad credit are just happy to obtain financing for the car they are in need of. If you have bad credit that does not make you any less deserving to be treated with respect and with a fair deal for both the company and you?

Here are a few tips to assure that you are choosing the right company that works with auto bad credit financing. They will grant you the auto loan you deserve while putting you in the car you desire for a fair price.

  • Are you working with a finance company who is also a dealership. If so, find out if you have the option of buying any car on the lot. Many will only offer vehicles that do not hold their value to those with bad credit.
  • Check the blue book value of the vehicle. This will assure that you are not getting hit on both ends. If you have bad credit you have to expect to pay higher interest rates. Only the more reputable finance companies will offer you a fair deal for the vehicle itself.
  • Is the company a buy here pay here establishment. While I have seen a few buy here pay here companies that offer fair deals on their vehicles, you need to be careful. Have the vehicle checked out and realize that you usually going to have a higher down payment and monthly payment. Make sure you get a warranty if you buy from a buy here pay here establishment.

In the end remember that your lack of or bad car credit should not dictate that you jump on the first car you see. There are many auto loan companies who are less than ethical and will overcharge you for a vehicle that will cause you more problems then you need.

Shop around, the internet offers many answers to helping people buy a great vehicle at a fair price that you can afford. By working with a reputable company you are also able to repair bad credit.

Why Secured Loans Are More Available Then Unsecured Loans

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When a person is searching for a loan they are going to find there are two basic types of loans: secured and unsecured. In the majority of cases they will also see that secured loans are by far more available then unsecured loans. There is a very good reason for this and that is why most people will end up getting a secured loan.

Secured loans are a loan that is secured by collateral. Collateral is something that the borrower puts up for the loan. An example is in the case of a home loan. When a person is buying a home the home becomes the collateral.

What this means is that if the borrower does not pay their loan the bank then becomes the owner of the home. They can sell the home to get the money owed to them. The collateral a borrower puts down must be something valuable that could be sold to make up the cost of the loan.

Banks and other lenders prefer a secured loan over an unsecured loan because with a secured loan they have some guarantee of getting their money back. When a lender lends money they are basing their decision on many factors. They usually will look at the borrowers credit history to get an idea of the borrowers ability and likelihood of paying them back.

They also look into a borrowers finances. This tells them if the borrower can afford the loan. Lenders understand, though, that even if a person can afford a loan and has the most perfect credit record does not guarantee a borrower will not default on a loan.

A lender looks at secured loans as less of a risk then unsecured loans. With a secured loan they are getting something in return for the loan that they know they will be able to sell, if need be, and recoup some of the money owed to them.

Secured loans are still a risk for the lender. Even though a borrower puts up collateral, the chances of the collateral actually equalling the amount of the loan is not likely.

This is especially true of auto loans where the auto being purchased is used as collateral. If the lender should need to sell the auto to recoup their money they will not likely get the full amount owed to them.

This is why secured loans are still not simple to get. A secured loan still requires the borrower to show they will pay back the loan. Lenders are still wanting to make as much off the loan as possible, so they are going to want to be paid back, not have to collect through collateral.

Secured loans are more available then unsecured loans simply because they are lower risk. Lenders like to have that added security of collateral. They like the idea that the borrower is willing to out themselves at risk too.

With a secured loan both the lender and borrower are assuming risk so it is a more even playing field then with an unsecured loan. That is why borrowers will find secured loans to be more available then unsecured loans.