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Bad Credit Car Loan
If you’ve got bad credit, you’ve probably been told that there’s no way you could possibly secure a car loan and that the only way you could get a car would be to save up the money and pay for it all at once. While this might have been true in the past, it simply is not the case anymore. At one time, those who had bad credit couldn’t think of getting mortgages or loans. Now, even people with the worst possible credit who have gone through bankruptcies can get loans. The path to getting such a loan isn’t easy, but it can be done.
Bad Credit Car Loans from Dealerships
Most likely, you’ve seen the advertisements from local dealerships stating no credit, no problem! We grant financing to anyone! While some dealerships might be sincere when stating this, most exaggerate the claim. That’s because it actually isn’t as easy as they make it seem.
In a lot of cases, the dealership will require a down payment in order to even get financing. This down payment could be anywhere between $100 and $1000. Other dealerships won’t require the down payment and will, instead, give you a loan with a very high interest rate. With or without the down payment, you’ll still be looking at $200-$400 a month in payments.
Dealerships may make it seem like they are in it to help you. The fact is, however, that most dealerships really don’t have your best interest at heart. They’re mainly in the business to make money. They’ll take a risk and loan to a person with bad credit, but only if there’s a good chance they’ll make a lot of money in the process. Dealerships realize that there is money to be made by charging outrageously high interest rates. That’s why they even bother to loan to very risky peopleit can be extremely profitable for them. And it comes at your expense.
Luckily for you, you have another option besides a dealership loan: you can go online and get a good car loan.
Bad Credit Car Loans Online
Before the internet, people with bad credit would have had to settle for high interest rates. That has, of course, changed. The online market is so competitive that lenders are forced to offer low interest rates to potential customers. Even those with bad credit can and do get loans with very fair interest rates.
When you get a loan directly from the dealership, you are often stuck with a very limited repayment plan. That’s not the case with online loans. You have the ability to negotiate with online lenders for a rate and repayment plan that is ideal for your situation. You also have the ability to request loans from many different lenders and aren’t limited to just one or two offers. That’s the beauty of the internet and online bad credit car loans: you can get what you need in a fair and quick way.
Since the internet is obviously prone to many scams, it is important for you to choose a loaner carefully. Generally speaking, you don’t want to go with a lender that you’ve never heard of before or one that insists on any kind of up-front payment. Also, stay away from lenders based overseas as these tend to almost always be a fake.
One you find lenders you can trust you should get as many legitimate quotes as possible so that you can get the best possible loan. Good luck!
Deciding Whether A Payday Loan Is Right For You
Payday loans are often touted as a quick fix for a bad financial situation, letting you bridge the gap between running out of money and your next wage or salary coming in. The basic idea is that you can borrow a small amount of a few hundred dollars for a short period of a week or two, and repay the debt next time you get paid.
This sort of service can indeed be very useful if you’ve run out of cash for living expenses, or if you’re faced with an unexpected bill or expense that you simply can’t cover when you need to, but are payday loans always the good choice they’re presented as?
First, we’ll take a look at the undeniable advantages of these loans, before looking at the disadvantages, and possible alternatives you may be able to use if you decide a payday loan isn’t right for you.
The lending criteria for payday loans are very generous indeed, and almost anyone who’s employed and has a suitable bank account will likely be approved. This means that even people with terrible credit ratings should be able to get a payday loan, despite being rejected for nearly any other form of finance.
They are also easy to arrange, and you can often get the money in your account in a matter of days. Some lenders can even arrange an overnight transfer of the loan straight into your account the very next day, which is obviously very useful when you need cash in a hurry.
Finally, once you’ve been approved for your first loan, it’s usually a very simple matter to ‘refresh’ your loan again if you find you need to make use of the facility if funds are again short in the future.
There are, however, two major downsides to payday loans which you rarely see mentioned in the advertisements and web sites promoting them. Firstly, they’re very expensive compared to other forms of credit. Because the term of the loan is so short, a fee of 20% of the amount you borrow – which is about standard – will work out to be an eye-wateringly high APR.
The second problem is closely related: because they’re so expensive, you can easily be left short of money the next month once you’ve cleared the loan and paid the fee. In this scenario, it’s just too easy to refresh your loan again to cover the shortfall, resulting in more fees, and a never ending cycle of borrowing.
So, if you decide that a payday loan isn’t a good choice for you, what alternatives do you have? The first one is making use of a credit card, if you have one. While credit cards are usually also pretty expensive forms of finance, they do allow you to spread the debt over a number of months rather than needing to be repaid straight away along with a fee.
Many bank accounts now offer an overdraft facility, which can also be used to cover a short term lack of money. The interest rate on an agreed overdraft is likely to be better than that of a credit card, but your bank may not approve your application. Beware of going ahead and overdrawing without your bank’s agreement, as the charges they will levy in this case will be very expensive.
If neither of these options is available to you, and you have no other way of getting hold of money such as borrowing off family, then a payday loan may be the best option. Just ensure that you use it properly, and heed the warning sign it’s giving you about the longer term state of your finances.