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- Minimum 600 to 640 Credit Score
- Loan range from $500 to $35,000
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- No collateral required.
- No prepayment penalty
- Terms from 3 months to 6 months
Instant car loan approval for a min 600 to 640 credit score. Instant funding, unsecured loan.
It can often be easy and convenient to get a car loan to buy a car if you can get the loan through the car dealer. That provides you with one-stop shopping, where you can get both the car and the loan to buy it at the same place. But just because it’s easy and convenient, doesn’t mean it’s the right to do. An unsecured personal loan may be better than a car loan for several important reasons.
An Unsecured Personal Loan End the Risk of Repossession
One of the biggest drawbacks of car loans – and one that almost no one pays attention to – is the fact that you can lose your car to repossession if you are unable to make monthly payments. And you only have to fall behind by one or two payments before that happens.
This is a much bigger problem than most people imagine. It’s one thing if a creditor repossesses your living room furniture or widescreen TV, but quite another if the item being repossessed is your car. That’s because while the other items are desirable, a car is an absolute necessity. Lose your car, and your life can change in a major way.
That’s because if you’re like most people, you need your car in order to earn a living. This is especially true if you have a small business, and need your car to travel to meet clients, vendors, and other business contacts. But it’s also true if you use your car to commute to and from work. In either situation, lose your car, and you may very well lose your ability to earn a living.
You can get around that entire problem by purchasing your car using an unsecured personal loan. A personal loan is unsecured, and that means that you will not lose your car in the event you are unable to make your monthly payments.
With an unsecured personal loan, the lender can garnish your wages or your bank account, but they won’t be able to specifically take your car. That will at least enable you to earn a living, so that you can pay your bills.
Unsecured Personal Loans for Bad Credit Can Work Better than Car Loan
If you have impaired credit, or borderline credit, getting a car loan through a dealership can be a major mistake. One of the tricks that car dealerships like to use is to put you into a lower credit grade. Which means that you end up with a more expensive loan.
This can leave you paying interest rates in excess of 20% per year, also extending the loan for six or seven years. You will be saddled with not affordable monthly payments, for a loan that will most likely exceed the value of the car purchased.
This is a situation that is commonly referred to in the car business as being “upside down” on your car. Which is the condition of owning a car that is worth less than the loan that is on it. Car dealers love when car owners are upside down. Because it practically locks them into buying their next car from the same dealer.
It’s likely that the dealer is making additional money on this kind of financing, as well as the fact that they usually pack add-ons into the loan, such as credit life insurance and a variety of maintenance packages.
You can get around all of that with unsecured personal loans for bad credit. You may still pay a higher than normal rate of interest, but you will know exactly how much you are borrowing, you will have control over the loan term, and you can avoid all the expensive and-ons that car dealers put into their loans.
No Need for a Co-signer
If your credit is really bad, or have no credit at all, a car dealer or auto lender will usually insist that you get a cosigner to go on the loan with you. This is a dangerous situation for the cosigner. If you make any late payments, they will be considered late payments made by the cosigner, and drag both of your credit scores down.
Worse, should you default on the loan, the lender can go after your cosigner to pay the difference. That could mean the end of your relationship with that cosigner.
But if you get an unsecured personal loan, or if you look at unsecured personal loans for bad credit (if that’s your situation), you probably won’t need a cosigner. In fact, most personal loan sources don’t even permit cosigners. That will enable you to get the loan that you want without having to put someone else – probably a family member – at risk of having their own credit damaged, or worse.
You Can Have Your Financing Lined Up in Advance
Yet another problem with getting your car loan from a car dealership is that you can never know that you will actually be approved for the loan until the very last minute. Not only does that create a very stressful situation, but it can also limit your options if you fear that the approval is not going to come through.
By using an unsecured personal loan you can eliminate that uncertainty. You can apply for the loan before you even go shopping for a car. That will remove any questions about your financing, as well as make you a stronger buyer when you are working with the car dealer.
After all, from the dealers perspective, you’ll be coming in as an all-cash borrower, which is to say that you don’t need any financing from the dealer. That will make you less dependent on the dealer, and in a stronger position to negotiate a better deal on other aspects of the car purchase, such as the price and the options.
Car dealers respect all-cash buyers in a way that they never do with buyers who need to get financing from them as well.
Save Money on Car Insurance
In most states, state law establishes minimum car insurance requirements. Those requirements apply to liability coverage. This is necessary to cover the claims that are the result of accidents that are determined to be your fault.
However, state laws don’t require that you have other types of car insurance coverage, such as collision and comprehensive. Those are the types of coverage that pay for actual damage to your or another driver’s car. Whether it is caused by you, other drivers, or by non-automotive disasters, such as storms, fallen trees, theft and vandalism.
Collision and comprehensive coverage can easily double the cost of your car insurance. And even though they are not required by state law, they are required by car lenders.
But if you obtain financing for your vehicle without using a traditional car loan, there will be no specific requirement for you to have collision and comprehensive coverage. You can have them if you want them and they are certainly desirable to have. But no one will require that you do.
You can create this situation by using an unsecured personal loan to finance your car. Since the loan is not specifically secured by your car, an unsecured loan will not require you to have collision and comprehensive coverage.
That can save you a lot of money on car insurance.
So if you are in need of financing to buy a car, take a close look at an unsecured personal loan, or even unsecured personal loans for bad credit. If the interest rates are even close to what they will be on a traditional car loan, you’ll almost certainly be better off using the personal loan to buy your car.