The Benefits Of Guaranteed Car Loans

Guaranteed car loans typically come through Internet lenders or car dealers. They are often called "pre-approved" loans because most people will be able to obtain this type of financing regardless of credit. This is possible because the lenders issue a high amount of loans each year at a relatively low loan limit. The lenders diversify their risk, and they can then extend more loans as a result. If you are seeking a guaranteed car loan, you are likely looking for some of the following benefits.

High Risk Applicants Accepted

Most people who apply for guaranteed car loans are high risk borrowers. While some will be very high risk and some only moderately high risk, these borrowers all need a lender who will work with a bad credit borrower. If you have good credit, you will likely benefit more from working with a traditional lending source. Interest rates on guaranteed car loans tend to be high, and low risk borrowers can find better rates elsewhere. 

Short Application Process

Applications for guaranteed car loans are very short. Usually, the loan terms will be determined based on relatively few financial factors. A borrower will only supply information such as credit score, amount of financing needed, income and possibly down payment. The application is typically reviewed by a computer program that simply puts the information into a formula. The formula then comes up with terms including interest rate, monthly payments and limits. The borrower can easily submit multiple applications for quotes because the process is so short. 

Short Approval Process

Guaranteed loans are often called instant car loans. They are called this because a borrower is typically approved within minutes of turning in an application. Because the application is considered by a computer and not by a person in most instances, the computer will be able to generate a response regarding the applicant's approval right away. All the applicant has to do is accept the terms of the quote, and the financing will be arranged instantaneously. Those borrowers who are looking to capitalize on a dealer's sale or special offer may want this very short approval window in order to line up financing in a hurry.

Little "Face Time"

Some borrowers do not want the hassle of meeting with a loan consultant and negotiating. While negotiations can result in better terms, many borrowers will settle for worse terms if it means a faster, easier process of accepting the loan. Again, low risk borrowers will do themselves a favor by negotiating loan terms. High risk borrowers will often have fewer options, and the need to negotiate will not be as important. If you do not want to meet with a lender and have no questions about the loan process, you can skip that step through a guaranteed car loan.


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