How to Avoid High Interest Rates When Taking a Bad Credit Car Loan
Sometimes high interest rates are major discouraging factor when taking loans. That is why banks that charge high interest rates are ignored by potential borrowers. A difference in rate no matter how small can have devastating effect on you budgetary plans. A small percentage difference between two loan products translates to a difference of several thousands of money when spread over a couple of years. When taking a bad credit car loan it is wise to think and calculate well to get the best deal after all it isn’t a bad idea to save a few coins in these hard economic times.
When taking any loan the first step is to compare several products from many different lenders. With the stiff competition in the lending business, rates have been lowered considerably so opt for the most competitive offer. It is also a good idea to choose a cheap vehicle when taking a bad credit car loan. Remember the more expensive a car is, the higher the interest loan rate. A cheaper vehicle will have a lower interest rate. Remember a bad credit car loan is meant to help you repair your tainted credit record so opt for a vehicle you can easily and comfortably pay for.
Another secret to avoiding high interest rates is paying a big down payment. A big down payment for a loan will go a long way to reduce the monthly payments and the resulting interest charged. Another secret is paying higher monthly installments than the set amount. If you are financially able, this method greatly reduces the repayment period and the interest rate. The last tip is to choose the secured type of bad credit car loan. This type has lower interest rate than the unsecured type.