subject: What you Should Know About Car Loans [print this page] What you Should Know About Car Loans What you Should Know About Car Loans
There's a good reason the image of the used-car salesmen is less than stellar. When someone is charged over 25% interest, it tends to leave a bad taste in the mouth. Not to mention the under performing jewels they stick you with. But what choice do many people have; after all as so many proclaim, "I have to have a car." But certain facts must be noted. If you have poor credit, not a large down payment, iffy working record, well, you're going to have to deal with high interest rates. However, they're not all the same and perhaps there are some loans that come with a little breathing room. And there are steps to take to help lower your monthly payment.
Ways to Help Yourself
While the term sub prime lender will forever had bad connotations(in regards to the housing collapse)the sub prime lender still is a player in auto-loans. So before signing over your life by purchasing a car with bad credit, check with a sub-prime lender first, he should be able to shave a few points off the interest. Essentially, the sub-prime lenders bid for the various loans available.
If your lucky enough to find someone that trusts you, you could have them co-sign. The co-signer, or co-debtor, assumes the responsibility of the loan if the primary debtor cannot make payments. A co-signer with a good credit score can significantly lower your interest payment.
Other Options
If looking for a better rate, the purchaser can always offer collateral. Collateral is any significant asset (home, boat, a rare comic book) that the potential borrower can offer. This is considered securing your loan to the lender. Another positive thing you can do is provide a large down payment, usually about 20% of the price. Not only will this lower your monthly payment, but it can gradually improve your credit score.
