Cars have become one of the most common necessities of common man throughout the world. Some people buy cars to fulfill their necessary requirements of their daily lives while others buy them so that they could raise their status in the society. To buy their dream cars, people go for various types of loans as they cannot buy them from their usual monthly pay and they are too expensive that saving would take years to buy that car. So they think that taking a loan is the best option to buy their dream car. This is because of the fact that despite cars being very common among the people, their prices have not slashed down and people have to think twice before buying a car even today. But with secured car finance, a person can easily buy his dream car without any difficulties in the financial process. Secured car finance is helpful in buying both old as well as a new car.
In secured car finance, the borrower needs to pledge collateral in front of the lender for the finance which would be provided by the lender. The amount of the finance is equivalent to the value of the collateral that has been provided to the lender. The collateral is preferably is in the shape of a car or any other property that belongs to the borrower. The collateral which is pledged to the lender plays the role of a security against the finance which is provided to the borrower. It can be retrieved back when the entire loan is paid back to the lender along with the interest which was calculated on the finance amount at a fixed rate of interest. Due to this collateral, the lender becomes free of tension about the repayment. He knows that for retrieving his property, the borrower will try to repay all the finance as soon as it is possible.
Secured car finance does not require any credit report of the borrower and hence it is also applicable for those borrowers who have a bad credit report. But the rate of interest is slightly high than the normal rates for those who have a bad credit as it is not certain that they would be able to repay the loan or not. So with rising the rate of interest might provoke those to repay the monthly installment at a fast rate so that there would not be much interest accumulated on their loan amount.
By: Robin Brain
Posts Tagged: Bad Credit
13
Sep 09
Secured Car Finance and Loan
6
Aug 09
What’s My Credit Score?
What’s my Credit Score, which is the million dollar question? Really, it’s the million dollar question. The reason is your Credit Score could cost you millions of dollars over your life time. Your Credit Score could take two different directions, Good or Bad.
Let’s assume it is bad, and you have 3 kids. Depending on your age, this situation could really affect a lot of decisions that you would have to make. Let’s assume you need to borrow money, and because of your bad credit score, the interest rate is higher than the current market is allowing. This payment is around $150.00 more a month due to the higher interest. Your three kids, are no older than 9. You are thinking about there future because you want them to have a better life than you are currently. So you are trying to figure out how to save for there college. The extra $150.00 dollars a month you are paying because of your score could have been avoided if your credit was better. This money should be currently going into a tax free college fund for your kids. This is just one example of how matters can get out of hand, when you have bad credit. Typically this situation snow balls into every aspect of your personal life. $1800.00 per year towards high interest is not very appealing to me quite frankly; I think you get the picture now.
Maybe you have a high credit score, and as the result you are saving an extra $275.00 per month. Wow, that is a lot of money you could put into that tax free account for all three of your kids. We all know things come up sometimes because of life changes, but knowing what to do is key. For every obstacle, there is opportunity. Most people don’t know there credit score, my advice would be don’t be most people. Your Credit is your Life, and could be your kids too. Never wonder what your score is again, be informed. If it’s not for you, do it for your family.
By: Mike Clover
18
Jul 09
Secure Loan
A secure loan will offer you the lowest interest rates and most flexibility from your lender. Of course, these benefits don’t come without an added risk from you.
When you borrow money you offer the lender some form of security, also called collateral. The most common type of collateral is your home. This is the only type most banks will take as second mortgages. When you use your home, or vehicle, as collateral you can go on using your property as normal, but sign a note stating that if you don’t make the payments the lender can repossess the property and sell it to make up the rest of the money you owe.
If neither of these collateral options work for you there is also the option of using jewelry or other collectible items of value. Not all lenders will do this so you’ll need to search around, but it shouldn’t be too difficult. You will need to have the item appraised before applying. When you use this form of collateral the lender will typically hold the item in a safe until the secure loan has been repaid in full.
Interest rates are largely determined by the amount of risk the lender is taking. By offering collateral the lender has a way of obtaining their money one way or another, so you have lowered that risk. Of course you have also raised your risk because if you are unable to pay you will lose your property, but because of this risk you are able to enjoy the benefit of a lower interest rate and more flexible terms. If you have bad credit you’ll find lenders much more willing to work with you, and if you need to extend the life of your loan they’ll be much more willing to work with this.
If you are looking for the best treatment from lenders and need specific things from a lender, you’ll have a much easier time doing that with a secure loan.
By: Jennifer Quilter