If you are suffering from the problem of a poor credit history and this is preventing you from getting a loan for buying your car, you can go through the process of guaranteed car finance. You get this kind of loan especially when you have an interest in buying a used or second hand car. With a not so perfect credit history, it is safer to stay away from the banks who will more than likely refuse a loan to you anyway after they have checked your records. So, if you really want to see that new car in your garage, then do opt for guaranteed car finance.
What Is A Guaranteed Loan?
When you receive a loan in spite of your bad credit or perhaps not completely perfect credit history from some lenders who agree to pay you the loan at a high risk, it is called a guaranteed loan. You are not hiding your bad credit history or the fact that perhaps, you did not get a credit rating at all. The lenders who give you this kind of loan know very well that you have approached their them only because you have had problems with getting your credit in order. They are aware about all these facts and are willing to give you a loan despite these problems. However, the reason why the lender or any organization is willing to give you money for your car at a risk higher than the usually taken by the banks is because the lender and the organization charge you a much higher rate of interest than what the banks would have charged. The risk comes at a price. So usually one would advise you to consider guaranteed loans only if all other sources of obtaining loans are closed. However, this high interest loan does pave the way for easier loans later by giving your credit history a good boost if you manage to pay the loan off on time. Your work details are not really the primary consideration with guaranteed car loans.
Points To Note Before Applying
It is true that these loans are easier to get when compared to the long drawn out and complicated process of securing loans from a bank, but this kind of loan also has some requirements in terms of documentation and proof of being able to repay the loan on time. You cannot escape the process of having your documents like property, tax return details and other needed papers to show them to the lenders. Some lenders are not satisfied with just these documents some will ask for someone who can stand behind you as a semi guarantee, having the cash to pay back the loan in case you cannot meet your obligations. Importantly, remember to check on the rates of all the guaranteed car loan lenders before you decide to choose one, to ensure that you get the best deal.
Though the time frame to repay these loans depends on the individual lenders, you can easily expect a time period of 5 years, though some will agree to shorter repayment periods.