Good credit score always assists an individual in borrowing an amount from the financial market for buying an automobile. But, what if an individual has poor credit score? Is he eligible to perform in the financial market and have his own automobile? If you are waiting for answer, then the answer is yes. And, means through which he can perform is poor credit auto loan.
Poor credit auto loans are available in two flavours, that is, secured and unsecured. The security in the secured poor credit auto loan is the collateral placed. On the other hand, in unsecured poor credit auto loan various documents and proofs act as security. The documents may relate to:
Flow of income
These proofs not only act as security but they are also the grounds upon which the decision regarding the interest rate and repayment period is taken.
Usually, there are many types of interest rate which are being offered by lender in the financial market but, most common are:
Fixed rate of interest
Variable rate of interest
Interest rate depends on the current market condition, bank base rate and the amount being borrowed.
It is also true that the secured poor credit loan enables the person to avail loan on low rate of interest as compared to the interest rate in the unsecured poor credit loan. Another fact regarding secured form is that the person can borrow large amount that is less than or equals to the equity in the collateral.
Poor credit auto loan, being a bad credit loan are expensive as compared to other conventional car loan in the market. So, it becomes necessary to check the pocket and budget before availing the loan, in order to know whether it is affordable or not.
The most effective and the cheapest way to get the information regarding loans and various lenders is through online method. Accessing through online also lets the person know whether the lender is authorised and reputable or not. As dealing with authorised lender, puts positive impact on the credit report of a person.
But have you ever thought of the facts which create poor credit? They basically happen when the person fails to maintain a balance between his expenses and income; that is, overspending or even bankruptcy etc. So, for the smooth functioning in the financial market, the person should avoid happening of such situation through making timely payments.
Poor credit auto loans are available in two flavours, that is, secured and unsecured. The security in the secured poor credit auto loan is the collateral placed. On the other hand, in unsecured poor credit auto loan various documents and proofs act as security.