Bad Credit Car Finance
In today's world, buying and owning a set of wheels is absolutely central to one's personal freedom, but unfortunately those of us without a spotless credit rating (or bottomless pockets of cash) may find it extremely difficult to finance a car without some extra help.
Bad credit loans
Bad credit loans are aimed at those with a sketchy credit history, and generally represent the most feasible opportunity for unreliable borrowers to finance a car.
The lenders in this scenario hold all the cards, and that means interest rates will generally be higher than standard loans. This can present some obstacles if you're uncertain of how your finances will look a year or two down the road.
On the upside, these sorts of loans do provide consumers with the opportunity to improve their credit score with regular and timely payments. In this sense, it's a great chance to get your finances back on track after a rough patch - as well as pay for a new set of wheels at the same time.
As with a normal loan, however, the interest rates you're offered will inevitably be tied to how much you need to borrow. As someone in a rather precarious financial position, it's probably best to go for a smaller loan to begin with. Don't run before you can walk.
Secured loans come with a huge warning label as they involve essentially using your home as an incentive for the borrowers - and if you fall behind on payments you could end up in big, big trouble.
They are available to those with a low credit score though, and they also offer huge borrowing amounts which far exceed the levels of a normal bad credit loan. Having said that, remember that you're only buying a car and it's simply not worth risking your home. We would recommend choosing, and sticking to, a reasonable borrowing limit.
Generally secured loans will have fixed payments with interest rates that vary significantly depending on how much you're borrowing. The upside is it tends to be easier to budget for, but the obvious drawback is your home may be repossessed if you fall into financial difficulty.
The point is: know your rights and make sure you've read the small-print before committing to such a risky contract. Companies don't lend unreliable borrowers a lifeline without having something in it for themselves, so don't expect them to bend the rules for you.
You've probably seen the marketing material for debt consolidation companies which essentially pool all of your existing debts into one, supposedly more easy to manage, repayment schedule.
It has obvious upsides, including the fact that, as advertised, you won't have to keep track of all your different debts. It basically removes any hassle - and it's also available to those with bad credit ratings.
Using debt consolidation to finance your car can help you to keep on track with payments as well as pay off any other credit card or personal loans you've fallen behind on, but it's generally a long-term solution and it will take a while for you to get your finances back on track.