Bad Credit Auto Loans
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Bad credit auto loans are loans for individuals who have bad credit. If your credit is not up to par, your best chance of obtaining a auto loan is by apply for a bad credit auto loan. Bad credit auto loans are not bad, they simply are not the best option.
These bad credit auto loans resemble the traditional auto loans. The only difference is that the bad credit auto loans usually carry a higher interest rate. The difference in interest rates between bad credit auto loans and traditional auto loans can be as high as 10%.
A person with perfect credit can get a loan with a 5.1% interest rate. That figure jumps to as much as 15.8% if the same person has bad credit.
A good thing to do before applying for a bad credit auto loan is to check your credit report. Make sure that your credit report is free of errors. A higher FICO score plays a major role in determining your interest rate. Before applying for a bad credit auto loan, check your FICO score and try to improve it.
If you cannot do anything to improve your score and are forced to apply for a bad credit auto loan, make sure that you pay the balance of your loan as soon as possible. The longer you stay paying the balance, the more you will end up paying in interest fees.
Posted by jonathan on September 22, 2005 at 05:12 PM