Unsecured car loans do not require any security or collateral. These loans are usually issued based on your financial standing, your credit history and your current employment จำนำรถ and income statements, which determine your potential to repay the loans. Since no form of collateral is being provided, these loans are a little difficult to get approved. Unsecured car loans are viewed riskier by the lender as they don’t have anything to sell if they need to recover their loan amount in case of default. To compensate for this added risk, lenders issue short term loans at a higher interest rates.
Unsecured car loans do have some benefits, especially if you do not own your own property. People who are renters can finance their car using an unsecured car finance, as long as their credit score is high enough. Also, if you are a home owner like myself who is unpleasant pledging my house for an auto loan, you can use an unsecured car finance. The processing for these loan requests is faster as there is no need for assessment of the property being pledged.
The interest rate and the term of unsecured car loans are fixed. So you get to plan out the timely repayments and make necessary supplements. Short term loans are also provided to people on a type of pension or people on a income support. But there are certain criteria how the borrower needs to fulfill to be eligible for an unsecured car finance. The borrower must be over 16 years and may have full-time employment. Normally, there are also minimum criteria for monthly income. In case you are trying to purchae a used automobile, short term loans are not given for cars which are over five years.
Even if you don’t have a perfect credit history, you can still get car finance financing. Actually, a few car dealers specialize in handling loan inquiries for those who have bad credit histories. If you want to take out an auto loan, then investigate the specialist car dealers and lenders that will conduct a market search for your benefit and provide you the quotes of the lowest available loan rates.
How to get The best Unsecured Car finance
So how to get the best unsecured car loans? The first thing to do is search for lenders who issue short term loans. Information about them can be found in auto showrooms or, quicker, over the internet. A good idea would be to speak to friends and family to find out if they have taken a loan in the recent past. They could possibly send you to good lenders. Once you have heard bout them, it is advisable that you invite quotes on the rates and the terms which is they are willing to extend a loan to you. It is only after you are delighted by the best rate should you may go with a particular lender for unsecured car loans.
Before you apply for your loan you should get a copy of your credit report and study it very carefully for any kind of errors. It is in your best interest to get the errors fixed prior to purchasing your car, as errors may affect your rate of interest. The approval of your car finance application will be based on a lot on your credit report and credit score. An accurate credit report will help the financial institution judge your past repayment ability correctly and thus say yes to the loan if you meet his requirements.
Remember that when you apply for your credit report you should get it from one of the three major credit agencies. You are able to get a free credit report each year from all three credit agencies. This government agency link can give you more information on the process. http: //www. ftc. gov/bcp/edu/pubs/consumer/credit/cre34. shtm
Before you approach the financial institution for an unsecured car finance, factors to consider that you are not paying more than 30% of your income towards your debts. If a higher amount is going towards your debt, lenders become reluctant to finance your purchase because they are worried that you will have a difficult time making your loan payment. If you are paying more that 30% of your income towards your debt service, not including your mortgage, then it is advisable to pay off the smaller debts so as to reduce the debt to income relation.
Unsecured car loans usually provide 90-100% of the total amount required to purchase your car. You can use the loan total purchase a car of any make or model. It can also be used to purchase a car, but the intended car should not be more than 5 yoa. An unsecured car finance makes sense for many people, so as not to tie up collateral uselessly.