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New Car Loans With Bad Credit – What You Can Expect When Applying
If you have a credit score that is below 680 you will likely have a hard time getting a car loan from a traditional dealer such as your bank but this does not mean you cannot get financing. This article shares where to look for car financing and what to expect when your credit is poor.
Used or New Car Loans for Bad Credit
The economy is down and banks (and all types of traditional lenders) are not loaning as freely as they once where this means you must have a pretty good credit score in order to qualify for financing from you bank. This leaves you with two options, you can either go directly to a car dealership that advertises that they can get you financing or you can go online and find a company that caters to getting consumers car loans for bad credit.
If you go directly to a dealer down the street you want to keep in mind that they have a motive of making a profit. This can mean that they will work hard to get you a loan but it also means that they might play around with your interest rate to your disadvantage.
A little know secret used by car dealers is that it is legal for them to add on to the interest rate that they find for you. For instance, if they find you a lender willing to give you 9 percent interest they can legally tack on an additional 3 percent and pocket that money. Interest adds up fast and this can translate into $100 extra for you a month.
Your other option is to go online and get car financing. The advantage here is that they will compete for your business and this means you will be offered the lowest interest rate possible and often without a down payment requirement. Another advantage is you can apply without having to sit face to face with someone, which can be embarrassing if your credit is not clean.
Either way when your credit is poor you will end up paying a higher interest rate compared to those with good credit but shopping online will likely give you the best rate and you can always consider refinancing for a lower interest rate in a year.
Means to Free Yourself from Debt
Some debts are fun when you are acquiring them, but none are fun when you set about retiring them. Ogden Nash
True to this adage of Ogden Nash, we feel great delighted the moment we obtain cash from a loan. The reason is that we all are able to hold on to ample sums of money to shell out for our needs, and sometimes even for our wants and simple desires in life. But paying off the money we owed is another story. We always find it difficult to set aside huge portions of our monthly earning for the repayment of our debts.
Because of these things, we suddenly find ourselves missing out on our loan and credit repayment. We may also incur late fees that can add up to the burden of repayment. Because of these two reasons, we end up receiving poor credit scores. But, it is by no means too late to repair bad credit histories and retire all our financial obligations. The particular remedies outlined below are a few of the effective means with which we could free ourselves from all forms of debt and credit.
Bad Credit Consolidation Loan
The most famous form of loan intended for people with bad credit history are bad credit debt consolidation loans. These types of loans consolidate or sum up all debts accumulated by a person as a result of unforeseen circumstances, domestic problems and even repayment delinquencies.
Once the total value of the money owed has been computed, together with the interest to be charged on the loan, the final amount will be subdivided into monthly installments that could stretch from one or more years. There are two primary kinds of bad credit consolidation loans: secured and unsecured loans. How do these two types of loan differ from one another? Let us see.
Two Types of Bad Credit Consolidation Loans
Secured debt consolidation loans are loans that have lower interest rates, lower yearly charges, and higher amounts available for loan than their unsecured loan counterparts. The majority of secured loans provide a maximum amount of $150,000 payable in 25 years. The only catch with this kind of loan is that it requires a certain property for collateral, to make certain the repayment of the loan.
On the other hand, though unsecured bad credit consolidation loans have slightly higher interest rates and annual charges, and lower amounts available for loan, as compared to most secured loans. The money loaned needs to be repaid for a maximum period of 10 years. Still, this kind of loan does not require any form of collateral from debtors. Debtors will just be required to process the documents to apply for the loan and after a few weeks 60 days, the applicant will soon receive the amount he or she applied for.
Yes, people have the option of selecting from these two kinds of debt consolidation loans that will help them settle their debts and soon repair their bad credit history. So choose any of these means and eventually you will be able to settle all your debts towards a credit-free life!