Used Car Loans - Own a Car Through Low Rate Finance

by : Kevin Clark

A used car is as good as new one in terms of its daily use. So if you can not afford a new car, a used one will serve the purpose. However, even a used car involves huge amount and so you may require a loan. Used car loans are carved out especially for enabling you buy a used car of any make and model.

In taking Used Car Loans the lender gives you secured or unsecured loan options. If the car is of high price, you can avail secured used car loans against your home or valued property. Even the car you are purchasing can be pledged as collateral. So you do not have to look for collateral. Main benefit of secured used car loan is its lower interest rate. For those borrowers who boast of a good credit history, the rate gets reduced, making it a cheaper loan. The loan amount depends on value of collateral.

Unsecured car loans are source of risk free borrowings as lenders do not take collateral. To cover risks however, lenders provide the loan at higher interest rate. You are approved smaller amount.

Either secured or unsecured used car loans, you would be required to offer a down payment. So make sure that you have enough money at hand for the down payment before applying for the loan. Also note that repayment duration of secured or unsecured used car loans is shorter in the range of 5 to 7 years.

As far as your bad credit history is concerned, secured used car loans, being less risky are easily approved but unsecured loans are approved if you are willing to pay higher interest rate depending on how low is your credit score. Your repaying ability is also seen while considering the loan approval.

Online lenders are source of lower rate used car loans and they process the loan without much costs involved. But compare them on taking rate quotes. Ensure that you buy the car from a reliable dealer and hire some mechanic for checking defects in the used car before finally buying it.