Getting a Decent Auto Loan on Bad Credit or No Credit

Whether a borrower has bad credit or no credit, it is still possible for him/her to get an auto loan with decent terms.  In order for a borrower to be assured of a good fit loan, research is necssary.  A borrower must research lending companies and car dealers for their terms.  Banks will not be the best place to search out bad credit or no credit auto loans because they do not typically lend money to bad/no credit borrowers.  It is important to remember that regardless of what a borrower's credit score is, they can build on the credit and make it better.  A borrower should view their credit as a beginning and start by making timely payments avoid defaulting on loans.  

Options

A subprime loan is perfect for someone with recent credit blemishes.  Subprime lenders provide consumers with loans that carry interest rates that are higher than normal market rates.  Additionally, their loan fees tend to be higher than standard fees.  The fees and rates tend to be a little higher because they are categorized as high risk, and thus charge the consumer accordingly.  The higher the risk, the higher the rate.  Subprime lenders can be found on the internet.

Another option that a bad credit or no credit borrower can inquire about is a hard money loan.  With this type of loan, a borrower puts up an asset as collateral for the loan.  The loan can be for up to as much as 75 percent of the value of the property put up as collateral.  The loan carries a high interest rate and is not dependent on credit score.  Again, fees and rates will be higher than market rates.  Typically, banks do not provide hard money loans.  A borrower will need to search the internet for hard money lenders.  Also, a consumer should examine upfront charges before agreeing to any loan terms.  Another type of loan that requires collateral is a secured loans.  A secured loan can also be a good way to obtain money. 

A payday loan can provide a borrower with quick access to money for the down payment on a car.  A payday loan can also act as an auto loan for people with bad or no credit.  A payday loan is typically allocated for a smaller loan amounts and carry high interest rates.  Also, they must be paid back relatively quickly. There are no credit checks associated with payday loans.


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