Shopper with low credit scores may still be able to finance a car purchase through a lending company like Consumer Portfolio Services. This type of organization work with both dealerships and individual borrowers to help people with problem credit purchase vehicles. Sometimes, this is the only way a person who needs a car can buy one. Consumers should understand certain aspects of these loans before they sign any contracts.

Length of Loan

Vehicle buyers who need financing will naturally want to keep their monthly payments as low as possible. This can make the prospect of a 72-month loan very tempting, but consumer experts advise against it. Paying off a car for six years makes the vehicle cost significantly more than it would have otherwise because of interest charges. In addition, loans for people with problem credit generally have higher interest rates because of the higher risk for the lender.

Co-Signers

Men and women with low credit scores or low incomes are known in the financing industry as subprime borrowers. One possible way to obtain a loan with a lower interest rate would be to have a co-signer, which reduces the risk for the lending company. The borrower must be absolutely certain of his or her ability to make all the payments on time. If this does not happen, the co-signer becomes liable.

Avoid Feelings of Intimidation and Pressure

When people are afraid of being rejected for a loan, they may put off the application process. They may keep driving an old car that belongs in the salvage yard or they may be without a vehicle at all. These men and women shouldn’t feel intimidated by lending institutions and dealerships. The dealers want to sell cars, and many of them work to approve nearly everyone.

There also is no reason to allow a feeling of pressure from sales representatives. These days, with consumers being able to find so much information online about vehicle pricing and ratings, sales reps tend to function more like customer service agents. A person who wants to buy a car will have many possibilities and should feel free to wait until the right vehicle becomes available.

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