These days, having a car is more of a necessity than a luxury. We feel the pride of ownership while purchasing one. Buying a car is certainly a passionate moment, and if it’s your first car, the joy is multiplied.
There is always a confusion whether to buy a car on loan or without it. Also, it depends on the financial status of the buyer. So, if you are planning to take a car loan, there are many banks that are willing to give you car financing.
The eligibility criteria to avail car lease differs from one lender to another according to the borrower’s profile. Below are some important points to be considered by the car loan provider.
- Buyer’s age: To avail the lease facility you have to undergo the criteria of minimum and maximum age.
- Minimum salary: They also want to know your minimum salary to sanction the required amount of car lease.
- Type of employment and its substantiality: Loan providers also want to be sure on your employment type, whether you own a business or a salaried employee further your duration into your profession.
- Type of car: Are you willing to buy a new are or a used one.
- Area of residence: Your residential area is also of very much relevance. If it is a rural area or urban area or is it a Semi-urban type of residence.
Besides this, different car loan approval companies offer different rates of interest. They provide less interest rate for long duration of loan period and more interest rate for short period of time.
Popular car financing providers are as follows:
- Ally Financial
- Chase Auto Finance
- American Honda Finance Corp.
- Ford Motor Credit Co.
- Toyota Financial Services
- Nissan Motor Acceptance Corp.
- Santander Consumer USA
You can check the official website of the lender for loan terms and conditions.
Avoid purchasing a high-end car if you are going through the condition of bad credit. Cheap cars are even a suitable option. Car financers also grant bad credit car loan to those who are not having enough credit to buy a car. These loans are also familiar as secured loans. But, if you don’t repay your car loan, these loan providers have all the permission to repossess your car. Repossession of your car means, they may sell your car in an auction.
Points to help you avail a bad credit car loan
- Make a high down payment: It would be useful if you volunteer to produce high down payment to avoid loan anxiety.
- Rent according to your capacity: Always borrow money keeping in mind your repayment capacity.
- Know the interest rate list: Before applying for a loan, go through the interest rate checklist. Opt the one offering minimum interest.
- Check the car loan eligibility: Getting a loan with bad credit is costlier than those who have good credit. Try to get a free credit report from one of the credit bureaus.
What is credit report?
Credit report is the credit score of the buyer. It is decided based on buyer’s payment history, credit utilization, type of credit etc. These statistics are used to calculate and analyse a buyer’s credit score and credit history. A buyer’s credit score is considered as it epitomizes buyer’s credit worthiness. It demonstrates buyer’s repaying capacity.
Tips to improve your credit report
- Schedule your loan payments on or before due date: Never be late for paying your equated monthly installments (EMIs) as it may affect your credit score.
- Avoid applying for multiple car loans: Don’t apply for multiple car loans as you may get rejected in the inquiry.
- Know your financial situation: Always avoid unnecessary expenses or you will face adversity in paying your monthly instalments.
You can always improve your credit score by clearing your outstanding dues, getting rid of your existing debts and making payments on time.