• Vital Facts About Guaranteed Auto Loans

    Guaranteed auto loans provide a last-chance option for those who have been declined by traditional finance sources. Most guaranteed auto loans are offered online by services like Rapid Car Loans but credit unions and local lenders sometimes have very few requirements for approval, so it may be worthwhile to check with local lenders as well.

    Consumers can research the various car loan options via the Internet or by contacting local dealerships. The only requirements of a guaranteed auto loan are a proof a stable residence, income to support the car payments and proof of insurance. Most customers who meet those requirements are guaranteed auto financing.

    The lender is sure to check the Kelley Blue Book for the expected value of the vehicle that you wish to purchase. You can do that as well and you should be aware of the current auto loan rates before pursuing financing for your car.

    As guaranteed auto loans target individuals with some bumps in their credit histories, a down payment is normally required. You may also be required to pay a sizable bank fee to complete the transaction, accompanied with significantly higher interest rates than a traditional loan. These range from the state maximum in your area to 24.99 percent.

    Knowing how much interest there is and how it will be calculated is important with any loan; it is vitally important when securing guaranteed auto loans, as the rates are substantially higher with these loans. In some cases they are triple and even quadruple times the prime interest rates.

    Guaranteed loans also have shorter repayment periods than traditional loans, with some terms as short as 24 months. Again, the terms available are based on your personal credit history, amount you plan to put down and the selling price of the vehicle you plan to purchase. They also focus primarily on pre-owned vehicles, since the lower selling price ultimately helps lessen the lender’s risk.

    Some guaranteed auto loan lenders will do a credit check and require up to six personal references, while others will not complete a credit check but may have higher rates and less favorable repayment terms.

    Finally, it is necessary to understand how auto loan fees are assessed with this type of loan. Some car loan lenders charge exorbitant fees for loan activation, late payments and even refinancing. It is important to understand how the company’s policies will affect you if for some unforeseen reason you are late or if you decide to refinance after you have re-established your credit.

    Bear in mind, if a guaranteed auto loan sounds too good to be true, it probably is. A lending institution may still deny your application and deny financing for most any reason related to your credit history.

    Nonetheless, guaranteed auto loans are excellent car loan options for people wishing to build their credit, but consumers need to understand exactly what they are and how they work.