A Bad Credit Car Loan As A Last Resort
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Posted On :
Dec-26-2011
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Article Word Count :
545
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You need a car, but an outright cash purchase is out of the question. Although vehicle financing is an option, your credit standing is less than stellar..
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You need a car, but an outright cash purchase is out of the question. Although vehicle financing is an option, your credit standing is less than stellar. So what are your options?
You may proceed with your purchase of a vehicle using any of the available bad credit car loans. Chances are that you will be given sub-optimum terms, but considering your present situation you really do not have much of a choice. Another alternative is to work on your credit standing first, and buy the car when an improvement in your rating is realized. This will result in a better loan package, which may save you thousands of dollars in interest payments.
Check Your Credit Report
Regardless of your line of action, it is best to validate your credit report. These are provided for free by the credit bureaus concerned. Obtain a copy from each of the three agencies, and then check them for their accuracy. There may be erroneous findings that have negative impact on your score, and these should be reported immediately. For all you know, your actual rating is not “bad” but “fair”. And this will definitely have a bearing on your intended car loan.
Be Ready to Bite the Bullet
After the validation and correction of the report, your rating may still remains as “bad”. What if you still decide to pursue the application for an auto loan? What are your prospects?
There are financing companies that specialize in bad credit auto loans, and it is just a matter of seeking them out to determine the applicable terms and conditions. More often than not, you will be faced with the following:
A high APR: This is understandable considering the risk that they will be facing in the event that they grant you a loan.
A low credit limit: This is to lessen the exposure of the company and is part of their risk management strategy. So you are unlikely to purchase that coveted brand new SUV.
1. A regular job and a minimum monthly income may be required. This is to ascertain that you have the paying capacity.
2. Some institutions may require that you have a checking account, which will eventually serve as your mode of monthly amortization payments.
Obviously, the zero interest or low APR offers are out of the question as far as you are concerned. Note that a credit union may provide a lower APR for this type of financing, so it is definitely worth considering especially if you are a bona fide member.
Seek to Improve Your Credit Standing
If there be no urgency to make a purchase, you can choose to work on the improvement of your credit standing first. This may entail paying off a large portion of your liabilities. Otherwise, it will be a slow process of reducing your debts little by little, and at the same time making sure that you make timely payments for the amortization of the balance.
With patience and persistence, you will eventually be rewarded with an improvement in your credit standing and better terms for your vehicle financing. Who knows, you may have no need for bad credit car loans after all.
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Article Source :
http://www.articleseen.com/Article_A Bad Credit Car Loan As A Last Resort_124326.aspx
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Author Resource :
If you are in the market for bad credit car loans, log on to bmacfinance.com. This is the website of a finance company that deals with bad credit auto loans. They are known for their fast approval times and personalized service.
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Keywords :
bad credit car loans, bad credit auto loans,
Category :
Finance
:
Finance
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