What's The Difference Between A Bad Credit Car Loans Versus A No Credit Car Loan?

You may have heard of the bad credit car loan service available in North America

, but when it comes to no credit check car loans it is still relatively new. Many car loan providers today are offering bad credit car loans; this type of service is quite common. Essentially a bad credit car loan has much lower requirement versus a traditional bank loan you can get through your local bank. The interest rate is higher on the bad credit car loan, usually ranging from 12% to 29%. A normal car loan will carry an interest rate from 7-9%; this increase in interest rate can be explained due to the high risk factor with a bad credit car loan. Because of this reason the loan service provider will adjust the interest rate to compensate for the increase in risk. At the end of the day they are just trying to recover their investment, in another word the loan they provided you. Remember in the world of business and finance, getting approved for a loan is not a god given right; it is a privilege only few can acquire. Because of today's failing economy and rise in the unemployment rate, many Canadians are fallen behind on their financial obligations.

Don't need to feel bad if you are among the many who is currently suffering from bad credit issues. But there is a distinction between bad credit car loans and no credit car loans. Bad credit car loans is what we refer to as class "B" loan services, the class "A" been the normal bank loans. No credit check car loans will be considered as class "C", this type of loan service is your last stop, or the "rock bottom" in the finance world. These loans are almost border line private loans, because no other financial institution is willing to lend you any money due to your poor credit history. You are essentially borrowing a large sum of money from a complete stranger. So to be trusted by the stranger without a credit check sounds far fetched. But due to the competitive nature of the automotive industry there are dealerships that are willing to offer you a loan based on your story.

It is absolutely true, a no credit check car loans means literally "no credit check required" they usually will require a small amount of down payment in the amount of $500 or less. So if you are tired been turned down from one dealer to the next, maybe it is time for you to look into a no credit check car loan.

by: Rick Li

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