Bad Credit Car Loans Online Are a Great Option For Avoiding in House Dealer Financing
Bad Credit Car Loans works for some while in house loans work for others. A clarification of the differences and similarities will be displayed for those seeking bad credit financing. If your credit is bad but not horrible it can still block you from getting a decent car loan. You need to improve it first to be able to get newer and more expensive cars at lower interest rates and lower payments.
If you apply to in house financing, you will get a good loan at a good interest rate with little concern for your credit history. However, this will not help you get a better car in the future. The in house financing dealerships are limited on what they offer and base their judgement purely on income status. The in house financing loan dealer will not report your payment activities to the credit bureaus. This is horrible as your hard work of making the payments on time will not be recognized in your credit report as no one else will know it.
The in house financing dealership does not use an external bank to finance. On the other hand, the Bad Credit Car Loans Dealerships use external banks to seal the deal. They make you buy a loan from the banks and get their entire money upfront from the bank and then give you the car and you make the payments to the bank and not to the dealership. The banks are the ones who record your payment activities and report it to the credit bureaus. So if you make payments on time, you will eventually fix your credit score and then can have the freedom to buy more luxurious cars at lower interest rate later on.
Not all bad credit car loans dealerships are the same. Some can give you better deals than others. It depends on the kinds of cars they have and with which banks they deal with. Ech bank has its own criterias of who to finance and for how much. So if you do not like the offers at one dealership, chances are it is because they do not have much connections to a variety of financing banks.
Many think that since their credit is not perfect, banks will not approve their credit score. This usually is not the case. It matters what kind of bad credit history you have, how long ago and how drastic it is. Of course, in house dealer financing is seen as the faster choice because every credit score is accepted, but the deals with the banks’ bad credit auto financing are usually better for their shorter terms and better car qualities.
It is always best to test drive the car and inspect it well as not every car has a warranty and warranties do not cover everything in a used car.