A Car Loan Can Put You in the Driver's Seat
Everyone wants to buy a car. For some, it is a need and for others, it is a luxury. It is not possible for everyone to buy a car. When you do not have money to buy a car, you can get a car on lease. In case of a lease agreement, you pay monthly rentals for a fixed time period. At the end of this period, you have to return the car.
Another option is to buy a car on hire purchase. In this case, you pay a small amount as down payment. The rest of the amount is repaid in the form of monthly installments. The car dealer charges interest when he sells a car on hire purchase. The advantage that a hire purchase agreement holds over a lease agreement is that you own the car once you pay up the price of the car along with the interest amount.
You can also take out a car loan to buy a car. The rate of interest on a car loan is higher than the rate on hire purchase. Car loans are mostly secured loans. You can offer your car that you are buying as a security. If you fail to repay the loan, your car may get repossessed by the lender. If you are a homeowner, you can offer your house as collateral to obtain a car loan. The rate of interest on a loan secured against a car or a house is lower than the rate on an unsecured loan. If you do not want to risk your property, then you may get a personal car loan. Personal car loans are usually unsecured and carry higher rates of interest.
Some people suffer from bad credit history. A bad credit history includes arrears, county court judgements, default, bankruptcy, etc. You acquire a bad credit score if you fail to repay a loan as per the loan terms. Late payments also contribute to bad credit score. People with a poor credit score may also want to buy a car. Lenders offer bad credit car loans to such people. The rate of interest on bad credit car loans is very high. Therefore, it is advisable to take out a secured bad credit loan to keep the interest rate at a low level.
About The Author:The author is a business writer specializing in finance and credit products and has written authoritative articles on the finance industry. He has done his masters in Business Administration and is currently assisting Adverse-credit-car-loans as a finance specialist. For more information please visit: http://www.adverse-credit-car-loans.co.uk
