Secured car loans
When looking for financing, it can be slightly more complicated if you don’t own a house or have a mortgage, but if you need a loan to buy a car, you can put the two together with a secured car loan and solve the issue in one go. A secured car loan is a monetary loan to purchase a car, typified by the car then being held as collateral and pledged to the lender in the event that payments are deferred or defaulted.
There are several differences between a secured car loan and an ordinary secured loan, the obvious one being that a car is used as a guarantee for the lender. Another distinction is that the amount available to borrow is generally a lot less than would be taken for a personal loan for such things as home improvements or debt consolidation, capped at about ?50,000. This does allow for the purchase of brand new cars, the borrower can even apply for some more capital, and then spend the excess on other bills or debt consolidation.
The interest rates are generally lower on secured car loans, due to the lower amount of money on offer. In the same way as other loans, a secured loan for a car is paid back in monthly instalments to the creditor, after they have paid the car dealer off in one lump sum. Unfortunately, applicants with a bad – or non-existent – credit score are in a slightly weaker position, they can expect to pay much higher interest rates than most other people who need a car. If you are thinking about getting a secured car loan, you should know that if you have a dire credit history it makes it a slightly riskier undertaking, especially considering the vehicle is under threat of repossession if you don’t have the money to make the repayments. If you’re lucky, you may be able to find a company that is willing to give you a quote even without a credit check, although you should probably question their motives and they’re not likely to give you the best interest rates.