Used Auto Finance For Bad Credit Applicants
The car financing market has tilted in favor of the borrowers just because of competition among the car loan lenders and the current recession
. As a consequence of the economic recession the cash has just evaporated and those people who were thinking of buying new cars have been compelled to reconsider their decision and most of them have now decided to buy used cars and avail used car financing.Most of the people who have decided to buy used cars, have bad credit and have not been able to afford the new car loans at any cost. The number of used cars buyers has increased dramatically. On the other hand the number of car loan lenders has also increased and the taut competition among them is obvious. No lender would like to let go even single borrower. The lenders know for sure that if they are not going to approve the used auto finance applications of bad credit applicants the other lenders will approve it and avail the business. Most of the car loan lenders are now interested in rotation of money and reduction in the risk of repayment. They are least concerned whether the car loan applicant is having a good credit or bad credit.
The major difference between the used car loans for good credit applicants and used car loans for bad credit applicants is that the bad credit used car loan rates are much higher than good credit car loan rates. There are several strategies one can resort to, to reduce the rate of interest. The higher the down or advance payment, lower is the applicable rate of interest. When the car loan is availed directly from the main lender without any agent in between the applicable car loan rate is comparatively lower.
When the car loan is availed to buy a car directly from the seller with any intervention of the dealer the applicable car loan rate is comparatively reduced because the charges of the car dealer are not included in the costing of the used car. Getting a good credit cosigner can reduce the rate of interest. Securing the car loan with the home equity or the car as the collateral is also another way to lower the rate of interest.
Assuring the lender of returning the loan by submitting proof of regular income through a stable job can help reduction of interest rate. Most of the borrower resort to comparison of loan quotes and negotiations to reduce the used car loan rates. Thus there are different ways to reduce the applicable rate of interest.
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