If you have bad credit or no credit, there are will definitely be financial sharks in the water who smell blood. They will attempt to take advantage of your situation to profit themselves, meanwhile placing you in an even worse situation than you were before. Borrowers with low credit must be especially careful when they are trying to purchase a new automobile.
Although many financial entities will offer car loans back will initially seem quite attractive to someone with low credit, the devil is always in the details. Many times, these low rate car loans can actually get a borrower blacklisted from future loans at any other financial institution. Below are just a few of the reasons to watch out when someone offers alone that is too good to be true.
One – The low rate is usually an introductory rate.
The rate that is advertised on many interest-bearing loans is usually an introductory rate that runs out after a short period of time. After that, the rate is raised to an untenable amount that does not allow a borrower with limited financial resources to pay it back. In the meantime, late fees and penalties are piling up, creating more credit problems in the present and in the immediate future of the borrower.
Two – Borrowing from companies with no reputation can get you blacklisted from more reputable companies.
A long-term credit report shows who will forward has borrowed from as well as the amount borrowed and paid back. Many reputable companies will not even lend money to a person who has borrowed from a company that does not have a reputation within the financial industry. Before any borrower decides to do business with a financial institution that is offering a surprisingly low car rate, they should check on the reputation of the company.
Three – Car loans with low interest rates usually have very inflexible terms.
If a car loan has a low interest rate for any period of time, the terms are likely very inflexible. This means that if a borrower misses one payment, his or her long-term credit may be immediately adversely affected. There may be other things written into the contract that may also be detrimental to the long term financial records of a borrower – the financial markets are still highly unregulated.
If you are borrower looking for reputable company to service a car loan, give your business to Clydesdale Bank http://www.cbonline.co.uk, a company with fair rates and a good reputation within the financial industry.
About the author:
Fiona Harris contributes to many blogs including Frugal Plex, where she helping people save money and keeping abreast of latest financial developments.