back to articles | March 04, 2020 | Dale Peterson
Categories:   Tips & Insights For Car Buying    Auto Loans & Financing    Consumer Credit    Loan Calculators & Rates    The myAutoloan Difference
Used Car Loans For Subprime Borrowers
Subprime borrowers looking for used cars are increasingly getting many financing options from many lenders. With more than one-fifth of the American population classified as having bad credit, it has become necessary for lenders to offer financing options to this group of people. The result has been the introduction of bad credit used car loans by most lenders.
There are many people looking to buy used vehicles yet they do not have the cash in hand to do so. Most of these prospects apply for car financing. A good number of them have a bad credit rating and their financing option would be subprime auto loans. These loans are specially meant for people with less than perfect credit and usually come with tougher conditions.
Tips and Advice on Used Car Loans
When you get approved for used car loans, you should not go to a dealership without knowing what to expect. Many people get excited when they are approved for car financing and do not carefully think about the car buying process. Even with a big sum of loan, you may find your budget stretched if you do not plan. Keep in mind that there are different costs that come with owning a car. For example, there are insurance cost, fuel, maintenance and repair among others. As you search for a car, keep these related costs in mind.
Below are some tips that can help you as you start your car search:
a) Set a budget
Go for a car that will fit your budget. For most people, a car that costs less than $15,000 is recommended. Come up with a list of the things you would like your ideal car to accomplish. Consider both reliability and fuel-efficiency when coming up with our list. This will help you to identify an affordable car.
b) Compare prices
When you identify a range of cars that match your specifications, compare their prices. Check car sale websites and call the dealers in your area to inquire about the prices of the cars on your list. .
c) Test-drive the car
Finally, take the car you have identified for a test drive. Make sure the car is in a good condition and performance well on the road.
Features of Bad Credit Used Car Loans
Subprime borrowers looking for used car loans are always charged a high rate of interest. Lenders charge the borrowers more to reduce the risk of losses that will result should a person default in paying back the money borrowed. The terms and conditions of offered to the borrowers also differ especially when it comes to the repayment of the loans.
The repayment period of used car loans for subprime borrowers also varies with various lenders. Most lenders offer financing terms ranging from 2 to 5 years. Other lenders offer loans with longer or shorter terms depending on the needs of the borrower. Subprime borrowers form a significant part of auto loan borrowers in the country.
Before you apply for used car loans, it is advisable to request for quotes from different lenders and compare them. This will help you to get an affordable loan.