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Written by Administrator
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Tuesday, 13 May 2008 08:37 |
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Yesterday I went to local car dealership Nissan and most of you know that Nissan have good branding but their experience with car loan is not well, not only Nissan have a problem with lending money to customers but as well different car dealers have the same problem because of economy recession. U.S economy is currently in high state of recession and car dealer are scary that you will not be able to pay off your car loan and they want to avoid reposition. Most of you may ask this question why they don't want to take my car away if I default on payment. There are many reason why car dealership don't want to take your car away from you .
The reason is that lenders need to fight in court and pay for a lawyer fees with is very expensive and they are not sure if court will give order to garnish your salary as well do to repossession because you may have better lawyer preventing you from taking your car away for even a simple reason you need a car to work to make money to pay off your car loan. So when it time to buy a car and taking a loan you need to consider many items before you decide to take a car loan. You need to be aware that a car loan is not a toys that you can play around anytime’s you want. Most of car loan are secured mean if you don’t pay your loan your credit score will be destroyed as creditor will take your car away and notify your credit bureau of your late payment. ! If you have a bad credit score you should consider to taking secured loan but you always should know what the consequence is. Secured car loan are very good suitable for those people that are willing to offer collateral but if you don’t have any collateral items and have bad credit score they will not give you secured credit loan even with co-signer. You may thing you know I have a good friend of mine that will co-sign my loan and car dealer will give me a loan whatever amount I wish to have this is not realistic in today economy environment not any more. Creditors will be scary even after economy stabilization because creditor will not trust to client anymore? How can creditor trust a borrower if they are late 30 days in payment, 60 days in payment or even 90 days in payment, don’t even thing about default on payment and not pay at all I don’t wish to be in your skin when it time to check your credit report. So you know that you have to have collateral but what is collateral what is mean? How it work? Those question lot of people ask me every day since I used to work for car dealership. Collateral is simple placing a home, real estate, boat, anything that have a value to secure your car loan if you default on your car payment they will take your home away , your boat or your real estate or any collateral you have put. If car dealer saying to you , you know what you are very valuable customers but we can’t give you a car loan because your credit score is low, and they tell you that you can obtain secured credit loan by give a collateral for amount of $15,000 is mean that they are liar and not work ethically because collateral only require if you are borrowing 90-100% of today finance so in this care you are pledging an asset ( asset is capital, money) of high equity value, you will be getting bigger loan simple saying if you give high collateral you will receive bigger loan. Bigger loan high interest rate and high down paying so I advice you if you want to buy a car for $50,000 don’t be stupid and finance 100% of car value! You should give at least 20% as down payment remember the bigger down payment for your car the less you pay in interest rate and the lower amount you pay as monthly payment. This trick lot of car dealer use they telling you that you can get car loan for 4.5% as APR annual percentage rate and then when it’s time to sign a document your APR is increasing to 4.8% you may think it’s not much in interest rate increase but those 0.3% will arise to $600 dollar for a life of the loan! So as you know you should not take a car loan if you have to give collateral. Don’t be stupid you better pay money to company to fix your credit score and then apply for car loan. My personal opinion about secured credit loan is bad because I was in financial trouble few years ago and I have to take a car loan with a home collateral and I almost lost my home right now I have to pay off all interest that acquire on my car loan account and I was almost declare bankruptcy and in addition I have pay about 8% in car loan interest rate. I don’t wish to anyone to get a secured car loan, take care of your Fico credit score and you will not have to take a car loan. Some creditor saying no credit no problem will have a option for you and you will be happy of our product and services remember this if you don’t have a money to afford a car don’t buy better to rent from some of your friends, family member or co-worker than paying high interest rate as I said repair your credit report. Simple way to repair your credit report is to fix your credit report and make sure your credit score is high enough to apply for car loan I will say 700 or more Fico credit score is good credit score and most of car dealer will lending you money. |
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Last Updated on Tuesday, 13 May 2008 08:42 |
