Longer Auto Loan Term: Is it a Boon for Bad Credit Car Buyers?

Auto loans are tricky. A single error can ruin your financial stability and earn you high interest rates in future. So, it is important that you understand every aspect of the loan process and make a wise decision.

When it comes to analyzing the multiple aspects of an auto loan, loan term takes a backseat. If you are in the loan market and confused over choosing the perfect auto loan program, do not commit the mistake of ignoring the loan term.

What are the Different Auto Loan Terms offered by Lenders?

A couple of years ago, the recommended term offered by lenders was 5 years or 60 months. However, the time has changed. Today, you can easily obtain 8 years or 96 months loan. Also, there have been instances where you can keep making payments on an auto loan for 9 years or 108 months.

Is a Longer Auto Loan Term considered as a Boon for Bad Credit Car Buyers?

If you are a bad credit car buyer, you will obtain higher interest rates than a good credit car buyer. Lenders understand that higher interest rates will make monthly payments difficult for you. So, they provide longer loan terms to make monthly payments bearable. Does it mean a longer loan term is a boon? It’s time to understand the financial effect of it.

The Interest Amount

If you have bad credit history, lenders will provide you with high interest rates. And, higher interest rates over a long period of time means higher amount of interest.

The Upside Down Situation

If you obtain a short-term auto loan, you will be in an upside down situation for the first couple of years. But, if you opt for a longer loan term, you will owe more than the car’s worth for several years. It is because you will make smaller payments every month.

The Selling/Trade-In Problem

If you are in an upside down situation, your car has no equity. It is difficult to sell such a car and buy a new one. Also, it is a challenging task to trade-in the car for another vehicle.

The High Maintenance Cost

If you opt for it, you will face difficulty in selling the car. And, if you keep using the car for several years, you will have to take care of increased maintenance cost such as higher repair cost and greater fuel expenses.

When is a Longer Auto Loan Term recommended to Bad Credit Car Buyers?

It makes financial sense in the following situations :

1. If you have received very low interest rates on the loan

2. If you can opt for substantial down payment and reduce the chances of an upside down situation

3. If you use your car for a very long time

There is nothing wrong in opting for a longer auto loan term. But, it is important to ascertain your situation before making a decision. Remember to look before you leap.

Fast Auto Loan Approval is the ideal financing partner for bad credit car buyers. Obtain second chance auto loans and get ready to buy your favorite car quickly. Apply now for bad credit auto loans and bring home your dream car.

Instant Auto Loan Approval for Bad Credit Car Buyers is NO Mythical Story

Bad credit auto loans are perfect when they come with instant approval. The very purpose of auto loans is to make a quick car purchase. That is not possible when you constantly get rejected because of your terrible credit history. But, now you can get instant approval on bad credit auto loans program without any worry. Fulfill your dream of buying a car with the comprehensive tips mentioned here.

Budget your Car

When you have bad credit history, it is important that you choose wisely. Don’t go for extravagance. Instead, select a reliable car. With a lower budget for car, you will definitely reduce your auto loan cost. A used car is often considered best for advancing your credit score.

Go to the Dealer’s Lot with Down Payment

Down payment is really effective in obtaining instant approval. This is because of two reasons.

Reason 1 - Putting money down lowers auto loan amount.

Reason 2 - It ensures the lender of your financial capacity.

So, make sure that you put as much down payment as possible. At least 10% of the total car loan cost will be really beneficial in getting instant auto credit approval.

Finding a Co-Signer can Fetch Lower Rates

Two is Always Better than One

Nothing is possible when you are working alone. Get help from someone with a good credit score. You can enjoy attractive rates by finding a co-signer. Anyone from your neighbor to your co-worker can be a co-signer.

Light at the End of the Tunnel

It is quite understandable that you are tired of constant rejection on your auto loan application. But, there are better things in store for you. Remember that bad credit score can always be improved. A positive attitude will definitely help you get the best deal.

Remember that you are at no one’s mercy. Any second chance auto dealership or poor credit auto lender knows that there are many people who are currently dealing with bad credit history. And, it is impossible for them to get a loan from the prime auto financing market. This opens up a pretty good opportunity for lenders and online auto financing companies. This means you have several options for getting a bad credit auto loan. Just stay calm and work towards it with this informative piece of writing.

All the best!