Tuesday, February 7, 2017

How Bad Credit Auto Loans Are Different

Times are changing for the better, as now even people with a poor credit score can get auto loans. However, many people still worry that they’re going to get a bad deal on their payments due to having bad credit. You may find some differences between auto loans for bad credit and ordinary loans, but nothing you should be concerned about.

Using Different Companies

The main difference you may notice on a bad credit auto loan is that it’s usually given by a different finance company. That’s because, rather than getting a poor deal with a ‘regular’ company, your dealer will help you to secure the funds you need from a company that specializes in bad credit loans.

Don’t worry about this, as your payments will still come out in the same way. Once you’ve signed the deal, you probably won’t even notice a difference.

Slightly Higher Interest

If you have a history of defaulting on payments, you may be asked to pay a slightly higher rate of interest. This is because the company may be concerned that you won’t pay your bill each month, so they ask for a little extra as a buffer.

While this may seem irritating, your dealer will help you to secure a payment that’s within your price range, so you won’t have to struggle every month to make your payments.

Additional Information Requested

Some companies may ask for additional information before granting a loan. This can include proof of your ability to pay, a stable source of income, or possibly even a co-signer. Your auto dealership will guide you through the process to make sure you’re happy and understand what you are getting into.

Even if you have bad credit, don’t be concerned about applying for an auto loan. Many car dealerships are experienced in making arranging car loans for people like you, and will even guide you through the process.

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