Do you want to save money when buying your dream car? Maybe you don’t have enough cash on hand to buy a car, let alone your dream car. Buying a car needs to be well thought out and not on impulse.
Has someone advised you to acquire it by applying for a car loan instead of paying cash? Well, this article means to help you decide whether a car loan will be beneficial for you. The most popular inquiry we see is whether or not financing option if you don’t have a credit history or if you have a bad credit report?
Why Should You Choose Car Loans?
Saving up money for buying your dream car is tough. This is where applying for a car loan comes in. So let’s talk about some of the benefits:
You have more flexibility with a car loan than you might think. If you have saved up around $7,000, you can use that money as the down payment for a brand new car. Then use a car loan to help with any other monthly payments. You will be able to buy a much better car than you first intended to have.
It’s an improvement for your credit score if you are able to make the payments on time. To increase your credit standing, you need different types of credit including mortgage loans, revolving credit, auto loans and student loans. A documented car loan with good payment history means a better credit score. In the future, if you require a mortgage, that auto loan may have helped increase your credit score.
Hitting a great interest rate may be another reason to opt for car loans. If you get an interest rate which is very low and a favorable one, then go for it.
Car dealers tend to desist from a cash purchase. Understandably, they prefer car buyers who buy by loan because they aren’t promised money from people who opted to pay cash monthly payments. Car dealers make more money from the deals they get from financial institutions and the extended warranties they sell.
Ask advice and shop around.
You can try personalloans.com for quick approval loans and for expert advice.
Can You Look for Auto Financing with No Credit?
Getting a car loan with no credit history at all may be challenging, but it’s not impossible. Obviously, you need to save up for the downpayment. The larger amount you will pay for downpayment the lesser the loan amount will be.
The essential thing you need to comply is to gather documentation. This verifies your history. Typically the lenders require the following documents:
1. Bank statement copy.
2. Proof of billing.
3. Proof of employment history.
A financial institution needs to ensure you have a bank account and it is in good standing.
A steady income stream is essential. The longevity you have with an employer shows the financial institution whether you can hold a job or not. Finally, a cosigner will be required. In cases where you fail to keep up with monthly installments, they will also be responsible.
Do Lenders Offer Auto Loans for People with Bad Credit?
Bad credit doesn’t mean you can’t opt for a car loan. Lenders also offer car loans which don’t tear their budget.
First, ask for your credit report. Seeing a detailed report makes you assess your credit standing. Before shopping for a bank, ensure that you paid your bills on time for at least six months.
Car dealers won’t drive away cash buyers, though, but it’s better to research whatever is the best option for you. There are pros and cons in availing car loans. Better be safe than sorry, so seek professional advice.