Very many people feel that they do not qualify for a car loan. There are many reasons why someone can feel this way. Some include poor credit history or low-income level. Despite your past credit history, there are very many available options that can guarantee you of car finance options. One main advantage of this opportunity is that it allows you to be qualified for a car loan even when having a low credit history. This, in turn, helps you buy a vehicle without the history of loan payments or defaulted loans. Car loans are designed for those who are in such a situation.
How they Work
Car finance options come with some conditions and policies that are to be followed. Anyone can apply for car finance. The buyer may have to pay as much as 11-12% more on this type of loan. The added interest acts as “security” in case you default the loan terms. This, therefore, means that you’ll be subject to a high monthly payment for the car.
The other term applied in these loans is that you will place a large amount of cash to buy the car. This amount is used to protect the seller as it ensures that if they cannot re-claim the car, it will be better to still hold an amount equal or higher than the amount that you still owe. This option is, however, not commonly used by many as it requires too much down payment.
Benefits of Car Finance
The benefits of car finance include:
• Your poor credit history does not affect getting the car finance
• It is an easy way of getting a car; you choose your preferred car, fill the credit application form and drive the vehicle away
• The car will have a warranty and will, therefore, be covered for any mechanical failures during that period