Saturday, August 4, 2012

Pros & Cons of Subprime Auto Finance Companies

Pros & Cons of Subprime Auto Finance Companies

Working with a subprime auto finance company is an option that many people with bad credit have to consider. While this will not give you the benefits that come with a traditional auto finance company, these lenders can still provide you with a few advantages.

Bad Credit Lenders

    The big advantage of this type of lender is that it is willing to work with people who have bad credit. If you have a bad credit score, there is a good chance that most traditional lenders will not extend you a loan. With a subprime auto lender, you can still get approved even if you have had a bankruptcy or foreclosure.

Application Process

    Many subprime auto lenders also have a very quick application process. Many promise not to run a credit check. This means that you will only have to provide them with basic information, including your employment situation. As long as you meet their other criteria, you should be able to get approved very quickly.

Convenience

    Many of these lenders also make paying your auto loan very convenient. You can often make payments at the same location where you bought your car.

Interest Rates

    The big drawback of working with a subprime auto lender is that you will have to pay a higher interest rate than with a traditional loan. These lenders have to charge higher interest to offset the greater likelihood of default with subprime borrowers.

Car Cost

    When you work with a subprime auto finance company, you essentially pay more for your car because of the higher interest and loan fees. If you can save up and pay cash, you'll be better off.

1 comments:

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    Marie Carlos,
    Texas USA

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