subject: Secure Your Vehicle With Unsecured Car Loans [print this page] Secure Your Vehicle With Unsecured Car Loans
Chances are, you have had some unsecured loans in your lifetime. These can include credit cards, lines of credit, personal loans, corporate bonds, or even bank overdrafts. The money in these cases cannot be secured against your assets. When you are looking to buy a new car and don't have a lot of equity, unsecured car loans may be the best method to get the money you need.
Lenders are willing to offer unsecured car loans to those with good financial standing, stable current employment, positive income statements, and high credit scores. Because they don't have collateral to collect if the borrower defaults on the loan, these types of loans can be more difficult to get approved, but can be a good option in some situations, for instance if you rent rather than own your home. Although the interest rates are usually higher than regular loans, unsecured car loans have fixed interest rates and terms. This will allow you to set up a monthly budget to make your payments, which will be the same each month for the length of the loan.
There are some criteria for a borrower looking for unsecured car loans. Full-time employment is a must, and the applicant must be over 18 years of age. There will also be a minimum monthly income, and the car you want to buy will almost always need to be under five years old. Your credit rating will also be inspected, so you'll want to be sure your credit reports are error-free and updated. Most credit reports contain some information that is incorrect, so carefully investigation and correction of any mistakes can help you get the best unsecured car loans. The loan will usually cover about 90% of the total cost of your car, so you will also want to make sure you have the money put aside for a down payment on the vehicle before you accept any unsecured car loans.
When you have all these prerequisites ready, start researching the companies that can give you the best unsecured car loans to fit your needs. Most will ask for the amount you will need to borrow, your down payment amount, and how many months you would like to pay the loan and interest back for the pre-approval phase. Some websites will allow you to compare the companies that give you pre-approval with each other, so you will have a good idea of the terms that you will most likely to be offered. If you have any questions, call the companies and ask them before making any decisions that will affect you over the long-term.
Once you get the probability payment amounts from the lenders, figure out your monthly budget to assure you are not spending more than 30% of your income on debts. Lenders may not be willing to lend you the money if they believe you may be over this ratio, because they will worry you won't be able to pay back their loan. This is especially important when looking at unsecured car loans, because the lenders are much more careful when choosing their borrowers than those offering secured loans. If you will be paying more than 30% of your income, you may want to look at a less expensive vehicle or a higher down payment.
Unsecured car loans can be a good solution to your vehicle issues with some research and a good credit score!
