The Catch in Guaranteed Auto Loan Approval
In current times the situation of debt has sky-rocketed to such an extent that banks and lending agencies have started approving loans to people with bad credit. Guaranteed car finance is an option been offered to many people with bad credit rating that banks and auto finance companies have understood that fact and hence, there is hardly any catch in guaranteed auto loan approval. Simple requirements need to be fulfilled for guaranteed approval on auto loans including documentation on income source and proof, personal references etc. Only if you have any prior money owed to the lenders, then you will not qualify for any loan from them.
Since there is no catch in guaranteed auto loan approval, it becomes easier for auto finance companies to approve the loan only if a few parameters are considered. Those parameters are as follows:
Higher Interest Rates: Whenever an individual suffering from bad credit applies for guaranteed car finance, he should be well aware about the fact that the interest rate charged on that type of loan will be more than the interest charged on a good credit rating. Since, the auto finance company or bank is approving the loan without any security and at a risk of giving the loan to a person with bad credit, it is imperative that a higher interest rate will be charged so that in case of a default, they will not have to bear the risk.
Down payment: A lender will be extremely careful while providing that much needed loan to a borrower with bad credit history because a lot is at risk. A huge down payment will require more personal investment and hence, it will ensure that the lender will be careful regarding monthly payments and paying off his debt as soon as possible.
Proof of Income: Loan approving agencies not only want the bank statements as proof nowadays, they also want other documentation such as the source of your income, and so proper official documents have to be provided to the auto finance company. For people who are self-employed, yearend tax returns act as the proof of income without which guaranteed approval on auto loan companies become difficult.
References: It is necessary to provide personal references, and these references will be verified so that in case of future discrepancies these personal references can be contacted.
Person to person car loans:
You have recently heard from some sources that the car that one of your relative or friend owned and which you admired will be sold off. You would want to grab person to person car loans for yourself since you have always wanted to buy that car. It perfectly matches your monthly budget set for repaying the person to person car loan and is a reliable bargain as you know the seller personally. Even though the interest rate is high and time period of repaying the loan is high, yet it is lesser in comparison to the premium set for a bigger first hand car.
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