Have you applied for a car loan only to be turned down? If you have then you may want to consider looking around for guaranteed car finance. When you apply for credit of any type, one of the first things the lender will look at is your credit file. This holds your financial information such as
Loans you have had in the past or present
Credit cards you hold now or have had in the past
Any late or missed payments
Loan or mortgage arrears
Store cards you hold
Arrears of any kind
If the information on the file is negative (eg missed payments, mortgage arrears etc) then this could well out off a lender approving you for a loan, as they will worry whether they will get their money back.
However, also other things can affect your credit rating too:
If you work for yourself, you could find it hard to obtain credit
If you do not have a credit history (this usually applies to the younger generation)
In any of these cases, a guaranteed loan to purchase your new car may often be applied for. So, what are the benefits to a guaranteed car loan?
Spread out the cost of the loan Cashfloat – you could spread out the cost of the loan over a period to ensure that the monthly repayments are affordable. When considering how long to take your loan over you may want to take into account that the longer you are repaying, the more interest you will pay back and so the dearer the car. Therefore, a fine balance will have to be found; usually loans can be offered over 1 to 5 years when purchasing a vehicle.
Have cash in your pocket – if you are buying from a dealer and already have guaranteed car finance you would be able to walk into the showroom with cash in your pocket. This puts you in a good place to bargain, as you are paying cash, and you could get something knocked off the sticker price.
Help to repair your credit – if you take out a bad credit car loan and you repay on time and pay off the loan without incident this may help you to begin repairing your bad credit rating.
Deposit or not? – if you can afford to put down a deposit, whatever the size, this means that you would have to borrow less. By borrowing less, you will be paying less interest, which works, in your favour.
Pay off the loan early – if your circumstances change for the better whilst repaying the loan you may be able to pay it off early. This means you Everyday news online business lifehack would pay less in interest and so will have got the car cheaper. However when considering this option you would have to check the small print of your loan agreement to find out if you would have to pay a redemption penalty to clear the loan early.
Compare guaranteed car finance – when looking for your loan you may be able to get the best deal through a specialist website that searches on your behalf. Some even offer cars for sale and allow you to search for a car. This can save time and money and of course you can do this from your own home.