Car Loans with Instant Credit Approval
You hear a lot these days about car loans with instant credit approval. The internet has seen its share of such offers. What is the deal?
In a manner of speaking, people with extremely good credit ratings have a sort of instant credit approval anywhere they go for a car loan. Car dealers want to sell cars and lenders want to make car loans and the good credit person is their dream come true. Sure, they are going to have to fill out some paper work and it might take a few minutes to process it, but it still about as instant as it is going to ever get. This is not what the ads mean by car loans with instant credit approval, however.
Instant approval car loans are intended for people with bad credit. They are being told that their bad credit is not a problem. They will be able to get behind the wheel one way or another regardless of past credit problems. There is usually some small print involved here. Applicants might be required to show verifiable proof of employment, for instance. However, in most cases the lender is being truthful. They will instantly approve just about anyone. How can this possibly be true?
Well, the answer is very simple. The instant approval lender is going to minimize his risk in two ways. The first is going to be a very, very hefty interest rate. This interest rate will often make the monthly payment on a very old used car more than a person with good credit will be paying to drive a new car out of the showroom. The second protective measure will be a sizable down payment or trade in.
The idea of the high down payment is to make sure that the total amount of the loan is considerably less than the value of the car. They are covering themselves in the case of a defaulted loan. If they are forced to repossess the car and sell it to recover the loan amount, it will be easier if the loan amount is lower than the cars value by a considerable amount.
There are such things as instant car loan approvals. They are going to come at a price. It is not much help to point out the importance of good credit here. That is a bit like shutting the barn door after the horse has already escaped. If you have bad credit, it is not the end of the world, nor does it mean you will have to walk. It does mean that you are going to pay a price. You need to begin to repair your credit somehow, and seeking out the lowest priced automobile that will fit your needs is the first step. An instant approval bad credit loan is not the thing to use to buy that new Corvette you always wanted.