Subprime Auto Loans: Red Flags to Look Out For
Sub-Prime auto loans can be a great benefit to a borrow with a lower-than-average credit score. However, a person with a low credit score will find it more difficult, and more expensive, to get a sub-prime auto loan. If that person feels pressure to get the loan, he or she is in a position to be taken advantage of. Here are some red flags to look for when seeking a sub-prime auto loan
If it's too Good to be True
There's an old saying with a lot of truth to it: "If it sounds too good to be true, it probably is." In truth, a person with a credit score below 620 will find it difficult to get a loan for the full amount of an auto purchase with an interest rate and time horizon that makes the payment affordable. If someone offers you a so-called great deal, then you need to look at it very carefully.
Read the Fine Print
Another old saying, this one about reading the fine print of any document you sign, applies to a "too good to be true" sub-prime auto loan. Very often, sub-prime lenders reduce their risk in lending to sub-prime borrowers by charging high up-front fees or by hiding other charges and rolling them into the loan amount. Never feel pressured to sign a loan document by an auto dealer or any lender. Read what you are signing.
There are honest, effective lenders out there offering sub-prime auto loans. Getting one of these loans and staying current with it can help you repair your credit. But watch out for the red flags.
If it's too Good to be True
There's an old saying with a lot of truth to it: "If it sounds too good to be true, it probably is." In truth, a person with a credit score below 620 will find it difficult to get a loan for the full amount of an auto purchase with an interest rate and time horizon that makes the payment affordable. If someone offers you a so-called great deal, then you need to look at it very carefully.
Read the Fine Print
Another old saying, this one about reading the fine print of any document you sign, applies to a "too good to be true" sub-prime auto loan. Very often, sub-prime lenders reduce their risk in lending to sub-prime borrowers by charging high up-front fees or by hiding other charges and rolling them into the loan amount. Never feel pressured to sign a loan document by an auto dealer or any lender. Read what you are signing.
There are honest, effective lenders out there offering sub-prime auto loans. Getting one of these loans and staying current with it can help you repair your credit. But watch out for the red flags.
