If you are considering buying a used car, you can purchase one through a private sale, a used car dealership, or a factory dealership that sells used cars. If you want to finance the used car, some options give you some flexibility as well.
Financing Through the Dealer
If you are looking at used cars on a dealers lot, you may want to discuss financing with them. Not all used car dealers offer to finance, but for those that do, you need to know what the term and the interest rate on loan. If the interest rate is too high, it might be better to consider another financing method for your car or truck. Likewise, an extended loan term can be problematic as well.
Secured Loans
Some banks will give you a personal loan, but they want something to guarantee the loan. If you are buying a car, the bank can use the vehicle, and if you do not make the payments, the bank can take the car, sell it, and recover the money you owe. A loan like this is typically obtained through your bank, and the time you have had an account may help you get approved for the loan.
Unsecured Personal Loans
Personal loans are also smaller loans through the bank, but instead of attaching the car as collateral, the loan is issued to you personally, based on your credit, the time you have been with the bank, and your loan history with them. You do not always have to use the money from a personal loan for a specified purpose, but the bank will most likely ask what you want the loan for when you apply. It does not mean they will make you spend all the money on a car, but if you have a credit issue, they may suggest a different type of loan to get you the money you need.
In-House Financing
While not a traditional loan, you can finance your car from a dealer that carries the loan in house. Buy here, pay here dealers use this kind of loan and cater to people with credit blemishes. The loan is secured by the car, you pay it weekly instead of monthly, and there is no grace period on the loan so if you do not make the payment, the dealership is likely to take the car without much notice. While this is not a traditional loan, it is a form of financing that is available for some situations.
For more information, reach out to personal auto loan services.
