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Use a Guaranteed Car Loan to Finance Your Next Vehicle

Your credit history will have little bearing on whether you can land a guaranteed car loan. Most dealers offering such financing also offer some sort of warranty on the vehicle.

Your credit history will have little bearing on whether you can land a guaranteed car loan. You should be able to find such loans locally or online. Online is often best just because of the shopping opportunities it will afford. The qualification process for a guaranteed car loan is a lot less stringent than for more traditional loans. You will need to offer proof of sufficient income to cover your monthly payments. Often this coincides with proof of employment. Usually the longer you have been with the same employer the happier the lender is and it could improve your interest rates.

A substantial down payment will help with financing

Most lenders like to see a substantial down payment. Guaranteed car loan lenders operate at a higher risk than conventional lenders. The down payment shows some earnest money and it gives an indication that you are serious about car ownership and sincere about repaying the loan. After all, you will have already made a substantial investment in the vehicle. Some lenders do not require a huge down payment, but it would benefit you to shop around.

Make sure you have a warranty or similar hedge

Most dealers who offer guaranteed car loan financing also offer some sort of warranty on the vehicle. Basically they do this out of self-interest. They have discovered that folks are more likely to keep current on their loans if they are not having to shell our hundred or thousands on car repairs. And the warranty also lets the buyer know that the dealer feels the car is in pretty good shape. A dealer would soon go out of business offering warranties on crummy cars.

You must shop to find the best rates and terms

Indeed, many places that offer guaranteed car loans will finance just about any Joe according to income benchmarks. But interest rates and repayment terms can vary widely among dealers and lenders. Some charge interest rates that would make a loan shark blush. It is necessary to do some diligent shopping to find the best loan. You may even want to do a little research and shopping online. As with any online transactions, be sure the site is secure. You might want to visit finance forums and see if other borrowers have had bad experiences with certain lenders.

These devices are a cost-saving necessity

Many providers of guaranteed car loans will sometimes slap a payment device on the vehicle. Usually installed under the dash, is will start flashing or beeping when a payment is due. When you make the payment, a code is given to allow you to turn the device off until the next payment is due. Often, if the payment is not made, the device can immobilize the vehicle. These devices also have a global positioning chip (GPS) so that the lender or dealer can easily locate the car if repossession is necessary. While these devices may seem embarrassing, consider the reality. These lenders deal with a lot of risk, risk substantially higher than traditional lenders. In order to stay in business and maintain the ability to continue offering guaranteed car loans to those how need them, they must have ways to cut their costs.

If you need wheels, guaranteed car loans are the way to go

If you are in the midst of trying to improve a bad credit history and traditional financing is not available to you, a guaranteed car loan may be the best for you, especially if you are dependent on individual transportation for job or family requirements. Just be sure you shop around, compare rates and repayment terms. Have a budget so you know how much you can afford to pay. Pay back the loan according to your contract to improve your credit scores.

Article Tags: Down Payment

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