Important things about Auto Loan with No Money Down
Important things about Auto Loan with No Money Down
Wondering about auto loan with no money down? Well, it is an auto loan with no down payment. This loan is ideal for those with bad credit. It only involve a co-signer, proof of income, and valid IDs.
There are things that makes this different from a usual car loan. It is important to take note of these differences. Knowing them would give you a possible options in getting a new car. Read below to know the things about this loan.
1. No down payment
The loan's name speaks for itself. No need to pay extra money first. The entire amount of the car is paid every month. You should pay these bills promptly to avoid extra charges on the interest.
2. Co-signer requirement
Instead of paying the down payment, a co-signer is required. The co-signer shares the obligations of the repayment of the loan. It is better to sign-up with a co-signer that shares a mutual sense of trust with you. Approaching a relative or a close friend will do. The co-signer should also have a good credit record.
3. Proof of Income requirement
Proof of employment is a must for this loan. This requirement ensures that you have a source of funds to finance the loan payments. The most common documents used as proof are rent or mortgage bill, electric bill, and phone bill. A proof of identification should also support these bills such as a valid driver's license.
4. Possible high interest rates
The no down payment scheme means that the total value of the car is on credit. The monthly payment is higher as well as the interest. The amount supposedly paid for the down payment is passed on to the monthly bill.
5. The need for extensive research
Research allows you to find the best New Car Deals offered by dealers. This aids in realizing whether you are getting the best out of the prospected loan deal or not. It would also help you find dealers that offer trade-in terms. Finally, knowing the necessary information would help you negotiate with the dealer.
