What Are Special Auto Finances - How Are The Beneficial?
The term special car loans might have come in your mind while you were searching for car loans
. The special car loans are usually for the poor credit people, its providing loans to the needy. According to the recent statistics, nearly sixty percent of the consumers have less than perfect credit. These consumers are not allowed to borrow financial money from the traditional banks or other credit unions. People with bad credit or poor credit are considered as special thus the term special finance is given to them.
Special finance is widely available today and many auto finance companies are providing loans. As the economy has taken another turn thus now more and more number of people are struggling to pay their finances. This lead to fall in the credit rating and it becomes impossible to purchase a new car because traditional banks refuse to lend money. But special auto finances have solved all the problems. Now, the individuals who are facing problems can drive their dream car because lenders are offering money to the high-risk consumers.
One can easily get guaranteed auto loan approval with special finance auto loan but it also has many disadvantages. The interest rate on this type of loan ranges from 5-26% which is higher than those charged by the traditional banks. The other thing is that special auto finances comes with a higher down payment which is usually from 20-50% and its even higher.
Keep a check on the dealers!
Another thing with the special auto finance is that few car dealers inflate the prices of the cars. This type of dishonest dealers will charge $10,000 for $5000 car price. The dealers also need a 20% of the down payment. Thus the buyer would be in a contract with higher interest rate. If the buyer defaults on the loan than the credit score would also be ruined. Ultimately the buyer has to pay double amount of the loan in the same purchased car. Thus in such scenario, private auto financing can be taken into consideration.
For consumers with poor credit, special auto finances are a good deal. A person can borrow the money they need to purchase a car. But they have to pay a higher interest rate and even a larger down payment. Lenders offering such type of loans are making a lot of money. There are also other loans like auto loans with no cosigner; no credit car loans etc which are on the high rise.
