Auto Loan Types
Most car owners will vouch for the fact that but for the auto loan that they had taken
, owning a four-wheeler would have remained a distant dream. Considering that dream-wheels do not cost peanuts, most middle-income people have to obtain car loans to be able to fulfill their desire or maybe even their requirement for a car. And with the loan market offering even bad credit car loan, the distant dream of owning hot wheels that most people harbor becomes quite within their reach. For all those looking for an auto loan, here is an insight into the various types available.Basically, an auto loan is of two types- direct and indirect. Direct loans are called so because in this case the borrower receives money directly from the lender that is usually a bank or a credit union. On the other hand, in the case of an indirect loan, the car dealer forms an intermediary between the borrower and the lender. An indirect loan is also available as a bad credit auto loan.
When you apply for a direct auto loan, the onus of finding a reliable lender, obtaining different quotes and interest rates, filling in the concerned forms, and collecting the required documents lies entirely on you. This means that while you are free to approach any lender you wish to, you also have a lot of sweat to break to ensure that you get the best deal available. In contrast, if you apply for the indirect auto loan, the car dealer will do all the above-mentioned hard work for you thus helping you to save a lot of time and effort. However, in return for the services rendered by the car dealer, you will have to pay him additional fees that make the process of getting an indirect loan more expensive.
The type of loan that you wish to apply for depends on your preference. If you wish to save money and do not mind doing spadework, then obtaining a direct auto loan should be your choice. However, if you wish to save time and the hassles involved and do not mind spending on commission to the car dealer, you should prefer the indirect loans. Also, bear in mind that since both direct and indirect loans are available as bad credit Auto Loan options, they can be availed of by those with a good credit score and those with a poor one.
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