Your car is paid off, you just got a better job and your pay just increased but your credit is not in the best place for you to get a vehicle loan with the banks.
Does this sound like your situation at all? Maybe not, but many individuals go into dealerships without any money down on the car that they want and then get denied from poor credit. In these cases, bad credit can be helped by providing a larger down payment towards the vehicle. Doing this can lead to a more likely approval rate from the banks.
In this situation, getting a car equity loan may be the best way to go as it could provide you with the downpayment you need to secure the new car that you are excited to drive.
Dealerships always have the banks they deal with; however, you could also see if your financial institution would approve you with a large down payment. They might offer you better rates and terms than the dealership’s banks.
If you aren’t looking to buy a new car, you have the option of using the car equity loan from the equity to purchase the used vehicle with a cash payment. There is more below that might educate you and better pertain to your situation.
Pro 1: You can use the equity from your vehicle to put a down payment on another vehicle
If you have a vehicle that has some equity available, and you don’t have the money for a downpayment or to even buy the vehicle right out, you might want to consider getting a car collateral loan. You can use the loan from the equity value of your current vehicle towards the payment or down payment of your new vehicle. It’s wonderful being able to pull the equity out of your vehicle and make that money work for you.
Pro 2: You can get better interest rates from the banks
Banks like to see some larger down payments. It shows you are responsible and, when you put up a larger down payment, they feel more secure to help finance your vehicle. Car equity loans ensure you can put money down on a vehicle you are financing. Additionally, you can get a better interest and term rate from the banks for a vehicle loan when you give a larger down payment on a vehicle.
Pro 3: When you can’t qualify with the banks, you can be approved with car equity loans
You can use the equity in your vehicle to get a loan approved with a car collateral loan. You don’t need good credit or even have a credit check run on you to secure a car equity loan, and they come with longer terms so to make the payments easy and affordable.
Pro 4: You can pay off your loan at any time?
Car collateral loans most often come with flex rates so you can pay back the loan anytime and not worry about being locked into a long term with fixed rates. The banks that most car dealerships are partnered with typically won’t let you pay off the vehicle loan they give you for at least 6 months. They want to make sure to keep you locked into paying the interest rate for at least that amount of time.
Next time you are looking to buy a vehicle and pay it off quickly, car collateral loans are a good solution that can assist in purchasing your next vehicle. Buying a new car can be an exciting process, but when the banks aren’t so kind to help out in your journey, you now have the education on how car equity loans can help your situation.