Before finally deciding to finance a used car, you need to carefully go through the Auto Check Vehicle History, ask a qualified and experienced auto mechanic to thoroughly inspect car and ascertain whether the car is worth the money you are lending. These three steps are of critical importance as otherwise you may end up burning your fingers.
Most banks and other financial institutions will not entertain loan applications for buying used cars that are more than 4 or 5 years old. Further, banks charge at least 2% higher interest on used car loans than they charge for new car loans. But there are many online lenders where the used car loan rates are closer to new car loan rates.
There again, you have to make sure your credit score is at least 680, as people with bad credit will have to pay higher auto loan interest rates. You may apply for a car loan only after getting your credit report online with healthy credit score. If you have bad credit, then it is prudent to submit a free application to a bad credit auto loan site that specializes in finding bad credit car loans for people with low credit scores. If your score is less than 540, it is pointless applying for a car loan until you repair your credit score.
There are generally two kinds of loans one can obtain for buying a used car. You can opt for either a secured loan or an unsecured loan. With a secured loan, some form of collateral is necessary for protecting the lender against default of payment by the borrower. Anything of value, such as your home, any land you may own, or even the car you want to buy can be collateral. You can benefit by a lower interest rate with a secured auto loan, but you also run the risk of losing the collateral property if you miss re- payments on the loan.
An unsecured loan is the type of loan one generally gets from a bank, credit union, or other financial institution. No collateral is needed for an unsecured loan but the interest rate for this kind of loan will positively be higher as the risk for the lender is great. If however you have a good credit score, your chances of getting an unsecured car loan at a reasonable rate of interest are quite good.
Despite the ongoing financial recession, buyers of used cars can still manage to get online loans from companies like up2drive and AutoCreditFinders. Check out online the companies that lend money for used cars and you will be surprised at the wide variety of loans that are available and the competitive interest rates. Loans for used cars are plentiful online and you should make an informed decision and choose the one that is right for your situation.
It will benefit you immensely if you can make a substantial initial payment while attempting to get a loan for a used car. A sizable initial payment will make your monthly repayments lower, which mean you, can also choose a shorter repayment term and get your loan paid off faster.
About The Author
Rick Braun is a SEO copywriter for Victorville car financing. He has written various articles like Fontana used car financing , Ontario used car dealers and more. For more information visit our site http://www.randbcares.com. Contact him through mail at randbcaresasn@gmail.com
by: Rick Braun
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