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Improve Credit Score with Bad Credit Auto Loans
By Matthew Moore
Every person lives with his own desires and dream either a house or any thing else. But what if the person is tagged with bad credit? Will he be deprived of things which he wants to own? Absolutely no, financial market has number of bad credit loans which are designed for specific purpose such bad credit personal loan, bad credit home loan and etc and, the person who wants to own an automobile, for them its bad credit auto loan.
In present times, bad credit auto loans are getting popular and are in great demand these days just of the reason that bad credit problem is common among people. With the help of bad credit auto loans the person simultaneously can also improve his credit score by making timely payments.
Making high down payment while purchasing an automobile simplifies the process of availing bad credit auto loan as the subsequent loan amount gets reduced. This further reduces the risk of the lender that enables him to offer competitive rates.
Like other initial loan in the financial market bad credit auto loan is also available in two forms:
• Secured bad credit auto loan
• Unsecured bad credit auto loan
In secured bad credit auto loan, it is obligatory to place collateral against the loan amount. Generally, it is seen that an automobile itself acts as collateral. Collateral also helps in availing the loan amount on competitive rates of interest and even with longer repayment period. But, secured bad credit auto loan comes with the term that if the person fails to make repayments of loan then the lender can seize or can take back an automobile or even can sell the asset placed as collateral. On the other hand, in unsecured bad credit auto loan, there is no such collateral involved but the person will be required to provide some proofs to the lender such as residence proof, income proof, credit worthiness, employment proof and bank account number. In unsecured bad credit auto loan the person is not required to fear for the repossession of the asset as there is no asset. But, this doesn't mean that he should become lenient in making repayments rather he should always try to make timely repayments.
Usually, the interest rate offered in bad credit auto loan is higher than the conventional auto loan in the market. Interest rate of the bad credit auto loan generally depends on the market condition, base rate and lastly the amount being borrowed. And, before accepting any offer the person should compare it to the other offers in order to avail the most competitive deal and rates. About the Author Matthew Moore is a specialist advisor of auto loans and is curently working with Modern Auto Loans. He holds a masters degree in economics from University of Warwick. For further details of auto loans, bad credit auto loans, online auto loans, cheap rate auto loans, personal auto loans visit http://www.modernautoloans.com
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Some other articles by Matthew Moore | |
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