If a person applying for car credit has a low credit score then it is prudent for him/her if the loan amount is low
. This is because the interest charged from bad credit score borrowers is quite high and this can make the monthly installments difficult for the borrower. There is only one way in which the loan amount can be kept low and that is by going for a used car. There are a number of dealerships and car lots which provide good used cars and that too at decent prices. The applicant should go to their website and browse the available cars, their prices and then the condition of the cars.
One might wonder as to how used cars help on bad credit rating car credit. The first benefit of these is that the amount which has to be financed is quite low. Consider the example: if a borrower takes 200 dollars on a car credit and has to pay it back on 15 percent interest in three years then the total money which has to be paid is 245 dollars and it comes out to be 82 dollars a year. However, if only 100 dollars is taken on 15 percent then the total money is 145 dollars and the yearly installments come out to be 48 dollars. Hence, it is quite clear that by going for a low amount, the car credit borrower is actually saving a lot of money.
Another benefit is that easy installments can be paid easily and these payments build a positive credit history. This allows the applicant to get approved for future loans at a much decent interest rate and quite easily too. This option shouldn't be avoided as the benefit of a prime credit score is one which cannot be provided by any other option.