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How to Get Secured Auto Loans with Bad Credit
If you have less than perfect credit, but still want to get a car loan with the lowest possible interest rate, secured auto loans may be just what you’re are looking for. These types of auto loan are sometimes referred to as collateral loans or car title loans. With this type of loan, you provide some sort of collateral, or security, to the lender as a guarantee that you will be making your payments every month. Miss a couple of payments, and you could possibly end up losing whatever it is you put up as collateral. When shopping for this type of loan, it is a good idea to know how much you need and how much the collateral is worth, because you will be able to borrow up to the value of the collateral. Many people use collateral loans a form of debt consolidation, to help clean up their credit. In other words, they’ll secure the loan up to the value of the collateral, purchase a vehicle for something less than that and use the balance to pay off some other outstanding debt, like credit cards. When shopping for car title loans, there are some things you need to keep in mind.
Know Your Credit Score and History
Your credit score isn’t going to affect your secured auto loan as much as it would an unsecured loan, but it will still have some bearing. For this reason it is always good to know what is on your credit report and make sure that everything that is there belongs there. Make sure that no closed accounts show as open. Challenge anything that you don’t believe should be on your report that appears there.
Decide If You Will Use the Loan to Consolidate Some Debt
This will be something you may want to mention to your lender when it is time to start shopping around. It may influence a decision in your favor or it may make your payments a little lower, since it will affect your ability to pay. One or two less bills to pay every month means that much more money will be available to go towards paying off the loan.
Research
Look into the cars you are thinking of buying or looking at. Determine a maximum and minimum price for them. Look them up to determine the actual value of these vehicles. Remember, even if you have cash, or check in hand, no dealer is going to sell the vehicle for less than its listed value.
Shop around for the Best Loan for You
Remember, these days, the Internet is one of your best tools when looking for the loan that is best for you. Many online lenders will be able to offer much more attractive loans than a traditional brick and mortar company. Get as many quotes as you can so that you have a number of them to compare against each other.
If you know what your credit report says, decide to consolidate or not, do your research and shop around, you will find the loan right for you with secured auto loans even if you have bad credit.
