Traditional Lenders and Dealership Lenders for Car Loans for Those Having Bad Credit History
Borrowing funds for the purpose of buying some new car can really prove to be a daunting and an exhausting task for those who have a bad credit history. Those institutions that are traditionally involved in the lending processes e.g. banks and financial institutions show hesitation in approving loan application of those having bad or poor credit history. Similarly institutionsthat go on to approve the loansdevise terms which are far from being optimal for the borrower. Therefore such borrowers to get the loan normally accept conditionsthat are against their interests.
They also have to wait for longer periods for getting informed about their application status. Having said all this, pleasing news is that despite the bad history that one tags with, one can still acquire loan. One of the options that such people can exercise for getting funds for car is through exercising car finance option through car dealership lenders or facilitators. This option is quite famous among those who are not certain whether their loan will be approved or rejected. However, this option has its own set of cons and pros which are as follows.
Pros of loans via Dealership:
Bad credit borrowers have to go through a lot of hectic procedures for getting loans and regardless of all the effort, there are chances that the loan might not be approved. So, car dealership loan is a much better option for them as it saves their time and effort.
Dealers not only help their customers in filling out their forms, but also help them out through all the process of submission and availing the best possible terms from their relevant lending company. Dealers do not finance you from their own pocket which means that there is no guarantee that your loan will be approved.
So all the processes involved are eased out for the customers and you just have to follow the instruction of your dealer who will be there with you all the way. If the credit score is too low, there are chances that you might not be able to get the loan. Those applicants who tag with a credit score of 620 or above are in with good chances of availing the loan and those with scores tagging at 600 or low may or may not succeed.
Cons of dealership loans:
The convenience factor that comes with dealership loans is though undeniable, but the expense factor is very much on the higher side. The main reason behind the high expense is the bad credit history which invites the dealers to charge high rates for their services.
Though it seems quite fair on the face of it, but the fact is that an extra 3 percent may be charged for. The lender charge for the loan may go up to 9 percent and this when accumulated with the dealer charge of 3 percent makes the total interest charge on the loan to be 12 percent. Though the process performed by the lender is a simple one, but still the 3 percent goes to their pocket directly.
Regardless o the fact that dealers have direct links with different lenders, the chances for the loan approval are still not much certain as it at the discretion of the lenders whether they want to approve the loan or not.
Alternative measures or options:
With traditional borrowers like bank and financial institutions being so reluctant in giving out loans to those having bad credit history and the dealers charging extra high rate of interest, people normally look out for other ways that can aid their purpose. Finding alternative sources on internet is also a good option because there are online lenders who are known to offer feasible terms.
Online lenders are known to be inclined towards borrowers with bad credit history and serve as a great platform for them. They have a variety of different loan packages which suit different borrowers according to their purpose. The rates which are charged for such loans are also comparatively lower and the chances of approval are very much higher.
They also have to wait for longer periods for getting informed about their application status. Having said all this, pleasing news is that despite the bad history that one tags with, one can still acquire loan. One of the options that such people can exercise for getting funds for car is through exercising car finance option through car dealership lenders or facilitators. This option is quite famous among those who are not certain whether their loan will be approved or rejected. However, this option has its own set of cons and pros which are as follows.
Pros of loans via Dealership:
Bad credit borrowers have to go through a lot of hectic procedures for getting loans and regardless of all the effort, there are chances that the loan might not be approved. So, car dealership loan is a much better option for them as it saves their time and effort.
Dealers not only help their customers in filling out their forms, but also help them out through all the process of submission and availing the best possible terms from their relevant lending company. Dealers do not finance you from their own pocket which means that there is no guarantee that your loan will be approved.
So all the processes involved are eased out for the customers and you just have to follow the instruction of your dealer who will be there with you all the way. If the credit score is too low, there are chances that you might not be able to get the loan. Those applicants who tag with a credit score of 620 or above are in with good chances of availing the loan and those with scores tagging at 600 or low may or may not succeed.
Cons of dealership loans:
The convenience factor that comes with dealership loans is though undeniable, but the expense factor is very much on the higher side. The main reason behind the high expense is the bad credit history which invites the dealers to charge high rates for their services.
Though it seems quite fair on the face of it, but the fact is that an extra 3 percent may be charged for. The lender charge for the loan may go up to 9 percent and this when accumulated with the dealer charge of 3 percent makes the total interest charge on the loan to be 12 percent. Though the process performed by the lender is a simple one, but still the 3 percent goes to their pocket directly.
Regardless o the fact that dealers have direct links with different lenders, the chances for the loan approval are still not much certain as it at the discretion of the lenders whether they want to approve the loan or not.
Alternative measures or options:
With traditional borrowers like bank and financial institutions being so reluctant in giving out loans to those having bad credit history and the dealers charging extra high rate of interest, people normally look out for other ways that can aid their purpose. Finding alternative sources on internet is also a good option because there are online lenders who are known to offer feasible terms.
Online lenders are known to be inclined towards borrowers with bad credit history and serve as a great platform for them. They have a variety of different loan packages which suit different borrowers according to their purpose. The rates which are charged for such loans are also comparatively lower and the chances of approval are very much higher.
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