Every one goes through some troubled times because of financial problems. During such times, a vehicle loan cannot be sought easily. But secured car loans are a great savior here. As the name suggests, a secured car loan is usually taken against some kind of equity. In most cases, it would be against the car itself. So basically the bank or the particular financial vendor owns the car, until the loan is paid off. In some cases, there may be rigid terms and conditions for the same.
Secured car loans can be sought in almost all places. Here the car loan is granted against a collateral or any equity simply because the individual has poor credit. So your chances of getting a loan are pretty good. But interest rates tend to shoot up since you have poor credit. There are two options that can be sought here. One is to get a secured car loan from a credit union or government body, which will be cheaper. Private vendors usually tend to cost more and hence higher rates of interest exist.
Individuals who have poor credit ratings can try improving their credit scores prior to applying for a loan. It has been seen that in most cases, simple options like taking a personal loan or paying off some bills on time works. As few bills are cleared the credit ratings go up. This provides the borrower with the advantage of fetching better rates.
- There are a lot of things that the loan provider checks when giving car loans. These include the kind of vehicle that you own or even taxes paid, insurance that you may have and the area where you live. Together they contribute towards your eligibility to fetch good rates. There is no doubt that fetching lower rates will mean easier repayments and hence everyone wants to aim for it.
- Secured car loans can be availed through different modes. At times, individuals with poor credit history may have a good employment record, which helps them fetch better rates. Along with this, you can use your home as collateral or even opt for some other piece of real estate that you may own.
Bad credit may make a lot of things difficult for you, but it is not the end of the game. There are institutions to help you barge better rates with a bit of negotiation. You can try getting better rates by-
Comparing online vendors who often provide better rates as compared to regular banks and institutions.
Keep checking your credit history via free credit reports so that bills are paid on time and you are able to improve your scores.
Check out auto financing with the dealer from where you are purchasing the car. Often, even with a bad credit report, but good history you may be able to get better rates.
All your secured car loan information is available with us. Keep in touch with us to find out more on how you can get the best rates and avoid getting into high interest debt circles.