When you wanted to buy a car, the first thought that would have crossed your mind is, ‘how to arrange funds for it’? In spite of a bad credit score it is possible to get a car loan, it’s just that you will end up paying a lot more than what you normally would, simply because the bank can easily re possess the vehicle, if you are a defaulter. So it’s best to check your credit scores on sites available online and check if you qualify and compare the rates and then take a call.
Sometimes advertisements seem very attractive as some have great interest rates as low as zero, but its only when you get to reality you understand that these rates are applicable for people, who have the best credit scores. People with slightly lower credit scores may get a good interest rate, but may not be able to enjoy the special promotional offers. As the credit scores lower down, the interest rates get higher. So, it’s important to compare and cross check with several banks before you decide, especially if your credit score is not great.
Tips To Reduce Your Interest Rates On Your Car Loan
- Opt for a short tenure for repayment. Short term loans for bad credit are a good option.
- New vehicles have lesser interest rates than used vehicles, so it’s best to consider a new vehicle when you plan to buy one.
- Avoid add-ons, which the dealer will talk you into, as these add to big bucks as time goes by.
Things To Keep In Mind When You Want To Take An Auto Loan
Auto shoppers need to be very careful when they opt for an auto loan, especially because there are several ways to get you trapped. Some of them are:
- Mark ups are a way to garner big profits by tactically making the consumer pay higher interest rates.
- Many times, you are stuck because you end up taking the vehicle home even before you finish with the paper work. The dealer then tells you about the additional charges and higher interest rates, leaving you with no choice.
- Unnecessary services might be offered and unknowingly you might give in to the idea because it looks all nice and fancy and then later on you realize it is added on to the amount.
- Some dealers advertise auto loans without even considering the credit score of the person and this attracts many without realizing that the interest rates are going to be exorbitantly high for a vehicle, which is not of great quality.
While looking out for an auto loan it is important to think smart because every time your credit scores are pulled out by the lender an enquiry is created and these could affect your scores. So be careful, do your research and then choose the best auto loan that suits you based on your credit history.