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Bad Credit Loans

If you have a bad credit rating, it can preclude you from many things. Used to be that if you had a bad credit rating, you would not be able to get a loan or buy things on a monthly installment payment plan. But not any more!

Say your trusty old car is not so trusty any more – the tappets aren’t tapping and its other myriad little ‘eccentricities’ are no longer charming – they are as annoying as the howitzer-like noise it makes when you turn the key in the ignition. You have either paid for it to be fixed or done your best yourself many, many times and there is just no saving it anymore.

There is nothing else for it – you need a new car. One with a clean bill of health and which is, frankly, not an embarrassment. You just can’t take it anymore.

Don’t worry, I have not forgotten what you said earlier about having a bad credit rating – and I imagine that this also means that you do not have the financial capability to purchase a new car outright…this does not mean that you cannot have a new car.

But I Have Bad Credit!

As I said, this is a lot less of an issue nowadays than it has been previously. Car loans for bad credit holders are becoming more and more obtainable, so if you are looking at car loans for bad credit holders, you have picked a good time.

Obtaining car loans with bad credit used to be close to impossible, but this market niche has quickly been filled as financial institutions scramble to offer their customers as much as they can.

If you have a bad credit rating, the terms of your loan may be a little harsher than if you were in possession of a clean credit history, but you can still get one. The car loans interest payments are likely to be a little higher and the payment plan a bit more inflexible.

How Does it Work?

Let us say that you want to buy a house. You do not have the hundreds of thousands you will need to buy it outright (who does these days?), so you need to pay your bank manager a visit. You put on your best suit and go down to the meeting.

You mortgage is approved! Congratulations! This means that the bank has effectively purchased your car and you are going to be buying it back off them at what will end up being a higher price, as they will be charging you interest.

The car loans interest payments will mean that the financial institution is making a profit on the money it has loaned you.

What Happens if I can’t Pay?

If you are unable to keep up with the payments on your car loan, it is likely that, eventually, your car will be repossessed by the financial institution in lieu of the monies still owing – just like a mortgage on your house.

Even if you have a financial windfall and decide you want to pay off a lump sum of your debt, this could incur a fee from the financial institution as you would be ending the contract you have signed with them early.

If you have a bad credit rating, and the only journey your car is likely going to be making is the one where you drive it to the junkyard, leave it there and then take the bus home, you may want to consider a car loan.

You will be able to drive places and you will be able to pay off the debt in manageable payments over a period of time. However, it will always pay to know absolutely everything about the loan you are considering – financial institutions who offer car loans with bad credit holders in mind are doing so with the view that they stand to make a profit on the money they loan – they can help you a lot, but make sure that you know all of the terms and conditions before signing the dotted line.