What’s a Good Loan Span for Buying Used Cars with Bad Credit Financing?
Inside the finance manager’s office of buy here pay here no credit check car lots, you have a few decisions to make. And one of those important decisions is the loan span for which you will want to take the auto loan. A lot of factors depend on the number you decide then. Depending on the dealership’s reputation, the manager may tell you one story but a finance expert will narrate exactly the opposite. So, before stepping into a bad credit used car dealership, you need to have a clear figure in mind. The loan span that will help you in the long run without taking away too much in the short term. But first, let’s understand….
Why the loan term matter?
Search for the best buy here pay here near me with no credit check financing and they will follow the market rules. That means, the interest rate that you will pay on your auto loan will be decided by the market. As per the current standards, a consumer with around a 500-plus credit score is typically charged over a 24% interest rate. This figure varies between 24-28% as the buyer’s credit score falls below 500 and touches 350.
Also, since interest rates are used in the market to offset risk, the rate payable rises with rising loan span. If a consumer takes an auto loan for 7 years say, he/she has that many years and months to default on his/her loan, and the risk of the lender is averted by charging a high interest rate. In all, if you have a poor credit score and intend to buy used cars with bad credit financing, dragging out the auto loan span will increase the interest rate.
What’s the golden number?
Family Auto of Easley recommends its customers to go for 3-year loans. This keeps the interest rates under control, reduces APR, and helps with your overall financial plans. Yes, the monthly payments will be higher when compared to a 7-year loan but you will not be paying higher interest for an additional 4 years. To cap off premiums as well, you can always go for less pricey used cars. We are the best Honda, Kia, Ford, GM, Volvo, Subaru, and Toyota of Easley used car sellers with a massive inventory and you are sure to get a model you like right inside your budget. Stick to the 3-year loan plan, pay low interest. Choose Family Auto and have no regrets.
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