So you have bad credit, it is not the end of the world. Given the current market and economic condition it is no surprise so many of us are in this situation. Been condemned as a “sub prime borrower” is one thing. But it is quite another been ripped off because of your misfortune in life. This article should be your aid to get a bad credit car loan at a reasonable rate.
When you are trying to get a car loan, the bank or the “lender” typically will assets your risk factors first, and according to their assessment will offer you an interest rate that will reflect your risk factor. Bad credit car loan in another word is deemed as “risky” loans due to the borrower’s past. The “lender” that is willing to take the chance to loan out the money usually will trade the risk factor with higher interest rate.
Typical interest rate on a new car loan can range anywhere from 0-8%, usually the manufactures will “buy down” the interest rate from the bank to create an illusion of a lower interest rate such as 1.9%, or 2.9%. Don’t get caught up in this hype or promotion, because reality is a credit union will typically produce a decent interest rate of 5-6% assuming you have good credit to qualify for the loan.
A typical bad credit car loan will carry interest rate range from 9% all the way up to 29%, where do you end up in that range depends on your credit score, history, co-signer and down payment. A respectable interest rate coming from a bad credit lender will typically be 14-18% and of course as you make your payment and your credit score re-build. There is always a chance they can lower your interest rate with time. It is usually better for you to take a higher rate to begin with just to re-build your credit, and lower your payment overtime.
This article is brought to you by Bad Credit Car Loans Toronto, your bad credit specialists, for more information please visit us online at http://www.badcreditcarloanstoronto.ca or http://www.badcreditcarloanswhitby.com