When it comes to auto loans, there are plenty of options out there for people to choose from. Most traditional car loan options run through banks and credit unions, where people with solid credit histories can go to make sure that they get the lowest available rates. For others, these traditional means won’t get them car loan approval. With that in mind, these individuals will usually go in for a no-credit check loan, also known as a same day car loan.
There are quite a few advantages to these auto loans, but there are some disadvantages to instant car loans that need to be noted as well.
One of the best advantages of these loans is immediacy. When you go into the lender with the necessary documents, you will be able to get your hands on a car loan on that same day. This means that you can be driving off the lot in a car within a couple of hours. This is important for many people who have lost their sole means of transportation. Without a car, these people are left in a tough situation where work becomes almost impossible and life gets really difficult. When you don’t have anywhere else to go, same day loans essentially provide a cash advance which you can use to pay off urgent bills.
There are hardly any requirements to get a same day loan—all you need is proof of employment and a checking account. You won’t be running around trying to find necessary information or worrying that you won’t be able to find a loan, because these simple requirements mean that just about anybody can find the quick money they need.
On that same line of thinking, another advantage to these is that they usually don’t require a credit check. For people with a poor credit score or an ugly payment history, this is a huge factor. With no credit check holding them back, these individuals are actually able to get the instant car loans that they need. In this way, the same day loans are to be considered something of an alternative financial means for people who have been shut out of the traditional financial market.
Even better, these types of loans can actually help to build good credit, so long as you pay them back on time.
As with most things, there are two sides to this coin. The most pronounced of these disadvantages is the fact you will be paying an interest rate that is often three times as much as you might pay with a bank or a credit union. This means the vehicle is going to cost you a great deal over the long haul, even if you might have a nice break in the short term.
Same day loans are not meant actually finance cars. Their intended use is more to make a payment on a loan which has already been financed. If you need more than $1000, you aren’t likely to have any luck finding a same day loan. Generally, same day loan amounts will be less than $500 – enough for a car payment, but not to finance a car.
Plus, most banks and credit unions do not provide same day car loans, so you’ll have to look to other sources to help. The Internet can be helpful, or else contact your car dealership and explain your situation. Dealerships want you to keep your car and make payments on it, so they will be willing to point you towards good lenders.
Another disadvantage is that these loans are quite volatile and you will have to work to find a lender that is reputable. In this industry, there are some lenders who do a nice job of making sure that people have what they need. Other lenders aren’t quite as honest, so it is important for car buyers to make sure that they seek out a solid, well-established lender before they sign on with these auto loans. This helps individuals protect their personal financial information.