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A poor credit automobile application usually has a high rate of interest and its monthly payment period extends from two to five years time. Certain things should always be taken into consideration before you take out a bad credit auto loan. You always must be aware of the current prices for used vehicles in your area since some dealerships may charge you higher prices just because you have poor credit.
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Ain't that the truth!! In the small town, where I live, they have ALOT of 'Buy Here Pay Here' kind of things. I know someone who bought their car at one of these places. two days later, the engine 'blew' in the car. She called the 'dealership' and explained what happened. Their attitude was basically " you bought it, you pay for it." She never made a payment on it and it's STILL sitting in her driveway. This was a few months ago. They DO charge a very high % rate and DON'T report to the CB's (if you have a 'good' record with them). Becareful of these places.
If you have a low credit score, the rate of interest is very high not only on auto loans but also on other loans. So if you have a bad credit first try to built up a good credit history just to improve your score because credit history contributes about 35% in your score. Prices on vehicles may not be high because of your low credit score but the interest rates may become very high and this high interest rate may push you to debt trap.
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You may put yourself MORE into debt, if you DO get a 'Bad Credit Auto Loan' and can't pay it back.
A person should really plan out a course before making a major purchase such as a vehicle, if you know your credit is bad then take a year or two to clean it up before applying for an auto loan, a few points can make a major difference in ones intrest rate on a large loan such as a vehicle or a home even.
If you are not in dire need, I would say put off the purchase and take the steps necessary to start rebuilding your credit before committing to a large loan at a high rate.
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Hello, GN. I do agree with that!! However.....a few years ago, I SURE was in dire need of a vehicle! My car just wasn't going to pass Inspection anymore and it was getting REALLY unsafe to drive. It would have cost ALOT more money to try and fix up, than what the car was worth.
I do agree with that!! Most people I konw always end up in dire need. I say try to put as much on the principle as you can to get rid of all the interest.
I agree with all above persons, for the bad credit score you pay high interest rate in every type of loan so first improve your credit score then go for any deal. best option for improving credit score is secured loan.