Anyone buying a car is likely to use some type of personal loan, or a mix of cash and credit.
Personal loans can be what are known as either secured loans or unsecured loans, and when thinking of buying a car or a truck can be done directly with the manufacturers dealership, such as Ford, Nissan, General Motors etc, or with another institution such as a bank or a credit union. A secured loan is more normal when buying a car or truck, or any type of motor vehicle.
A secured loan means that the loan is based against the value of the car that it is being lent against. This means that in the event of the person taking out the loan defaulting on it or not being able to pay it back the car becomes the property of whoever lent the money and they can sell it in order to try and get their money back.
An unsecured loan is more common from banks and credit unions, and can be for any purpose at all subject to the approval of the lender. An unsecured loan does not have any collateral against it, and as such is likely to have a higher rate of interest than an unsecured loan, and generally less favourable terms and conditions such as the size of the down payment or the length of time of the loan period.
A personal loan that is taken out with someone such as Ford Credit or GM financial is for many people the most normal and straightforward way to borrow money to buy a new or used car, but as with all types of personal loans there are other options available, some long-term some short-term, some better than others !
Personal Loans and Payday Loans
Payday loans have a pretty bad reputation largely because of their huge interest rates, and are unlikely to be used when buying a type of car or motor-vehicle.
However some may consider them if they fall short during a particular month and had problems with your other commitments for their monthly repayment on a car loan. Payday loans market themselves as being a short-term solution to help bridge some temporary funding problems.
Whilst this may be true one sense, they can be hugely expensive to manage and should only be used as an absolute last resort. There are normally other options available including the option of refinancing the original loan should export first.
Personal Loans and Bad Credit Loans
Bad credit loans can be a real problem for a lot of people looking to buy or use any car or truck. People who have a bad credit history not only find it more difficult to obtain any type of credit or loans, but also more open to be exploited by people offering what may seem to be easy solutions.
The whole idea of bad credit is one that plays into the hands of people looking for some type of financial help us at the same time feeling grateful for any type of loan or credit offered however poor the terms and conditions may be.
The real solution is to really examine the nature of your credit report credit history, and take a longer-term view to re-establish a good credit reputation and manage credit for much more effective and beneficial way.
Personal loans and On-line Loans
The growth of the Internet has spawned a whole range of on-line loan companies and businesses, many of them offering supposedly cheap and easy solutions to anyone looking to arrange finance to buy a car or truck with a personal loan.
The problem with a number of these websites is very exactly who you are dealing with. If the website is a front for a legitimate bank or credit union than there should be no problems.
If it is a purely on-line company that can be trickier as they will our a considerable amount of personal and financial information from you in the first place by way of application, and in the event the application is successful, there may be problems further down the line in terms of contacting them and dealing directly with any personnell.
Personal Loans and Small Loans
Small loans may seem small at the time, but can quickly go if they are potentially payday loans is referred to above, where the interest on explode very quickly and turns what looks like a fairly small loan or advance in something actually quite huge. When considering a personal loan to buy a car or truck try and stick to auto dealerships such as Ford and General Motors, or the more traditional routes such as a bank or a credit union. If emergency cash is needed by and use a credit card if possible, or some other type of temporary bridging facility.
Personal Loans and Quick Loans
Personal loans that are advertised as quick loans often come under the same banner as small loans and payday loans.
The indication in the very name quick loans is that there will be an easy and quick decision made, can often appealing to people who have a bad credit history or who fear a lengthy investigation that finances prior to being able to borrow any money.
Any reputable leader be it Ford Credit or General Motors is likely to consider an application form reasonably quickly as it is no interests to come to a decision and let you know what that decision is. Anyone advertising an incredibly quick loan may do it quicker, but odds are they are likely to charge a much higher rate of interest or impose much less favourable terms and conditions.
No Credit Check Loans
Any loan provider seeking to entice custom by way of making a point that they do not carry out a credit check either has money to give away (which is unlikely !) or is in some way looking to attract people who are vulnerable because they have a poor bad credit history and believe that any credit check will simply stop them being able to have a personal loan.
Anyone with a poor credit history or bad credit looking to obtain a personal loan would do well to investigate their own credit report first, and do what they can to improve their credit score and then shop around.
Even someone with bad credit may well contain some type of personal loan from a reputable financial institution, even if the rate of interest is higher than it would be otherwise. In the long term this is likely to be a much more beneficial solution financially.
Personal Loans Low Interest Loans
Low interest loans obviously have an attraction, just be aware that there are normally other terms and conditions which will compensate for a lower rate of interest than would otherwise be the case.
Sometimes low interest loans are aimed at people who have an exceptionally high credit score, and are deemed a very good risk to lend money to. At other times, low-interest loans are affected subsidised by acquiring a much higher down payment, or a significantly longer period of a loan term.
The thing to watch for these type of loans is whether there is any penalty charge that may be incurred if the loan is paid off early, which can often be significant in terms of additional charges.
