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Quick Auto Loans: Advantages and Disadvantages
Within the complex world of car and truck financing, quick auto loans have their own place in common product lines offered by the general community of lenders. Quick auto loans are a general category of car or truck financing agreements that don’t include a lot of lender research, paperwork, or time spent waiting on loan approval. Fast auto loans have some definite pros and cons. Here are some of the advantages and disadvantages of taking a quick auto loan from any one of the various auto loan lender options.
Pros- Time Is Money – With quick auto loans, a car shopper can sign off in record time and get back to work in order to pay off their investment. Every hour worked increases the borrower’s ability to make payments, and so the time savings involved in quick auto loans can be valuable.
- Sales and Special Deals – Quick auto loans make it easier for a specific individual or household to take advantage of limited time sales events. If you see an offer that is bound to disappear quickly, getting a quick auto loan may be the difference between latching on or missing out.
Cons- Limited Understanding of Loan Terms – In quick auto loans, the lender is less likely to go over many of the loan terms with the borrower. There may be a lack of understanding about the interest rates attached to the loan, whether those interest rates will fluctuate, and what they will mean in terms of monthly payments. The vehicle buyer who is signing on to quick auto financing may also be unaware of the consequences of missed payments, or other aspects of being a responsible borrower.
- Less Established Lenders – Those offering quick auto loans are more likely to be taking risks in lending agreements. Established lenders such as banks and captive finance companies often like to do business the old-fashioned way, including thorough research on a borrower, such as credit risk assessment and proof of income. The lack of these items can be a red flag for someone entering into a loan agreement.
- Higher Interest Rates – Because lenders offering quick auto loans may not have time to do the more thorough research mentioned above, they may simply assign much higher interest rates to a loan. The interest rate will determine how much the car buyer will pay over the term of the loan, and ignoring the interest rate can result in a lot more debt for a car buyer.
- Excessive Fees – Another item quick auto loan lenders may include is a great deal of fees and conditions in order to protect their investment in loans that are made without thorough research. Keep an eye on these terms, and always look for how they may impact your financial situation later on.
These are some of the common issues buyers tend to look at when assessing quick auto loans from lenders who are willing to waive some of the usual research included for securing a loan deal.
