Loans for Poor Credit Scores

By: Apurva Shree

Are you feeling disappointed that bad credit history is preventing you from purchasing your dream vehicle? Well, worry no more as bad credit auto loans are here to provide the required finance for your car. The intense competition among car loan lenders has led to many lenders providing loans in spite of borrowers having a poor credit history. These loans are provided on careful consideration of certain factors. The borrowers need to assure the car loan lenders of their ability to repay the loan on time. Adequate proof of this has to be supplied in the form of bank statements and income documents.

Types Of Bad Credit Auto Loans

Bad credit auto loans are mainly given as two options i.e. secured loans and unsecured loans. Under a secured loan the car or any other collateral needs to be pledged as security with the lender. Secured loans often carry a lower rate of interest and are also easily approved due to the collateral being placed. Unsecured loans generally have a higher rate of interest as there is no collateral and hence the risk to the lender is more. Both these loans are generally provided for a time period ranging between 5-7 years. Clearing some of your old debts can improve your credit score which may in turn fetch you lower interest rates while applying for bad credit auto loans.

Online Car Loans And A Bad Credit History

Many car loan lenders including online lenders have started providing finance to people who have a bad credit score. Bad credit auto loans can now be acquired as online car loans also with just a few mouse clicks. Many of these lenders at no extra cost also provide car loan calculators which is an extremely useful tool to determine the ideal car loan among the various options on hand. Auto loans for individuals with bad credit can be acquired for the purchase of either a new car or a used one. However the used car should not be more than seven years old.

A person may incur a poor credit score due to many reasons such as accumulated arrears, defaults, repayments that have been omitted and so on. With the advent of bad credit auto loans, even those with a bad credit history are being provided with the opportunity to purchase a vehicle. A down payment is however required while acquiring these loans. Refinance car loans are also being provided by some lenders even for those with a bad credit score.

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