If You Have A Bad Credit Score Then You Can Still Obtain Car Finance If You Know Where To Look

For those who have poor credit scores, no credit history, or have had issues with their credit rating in the past, it is possible to buy a car, even though most bank lenders would not be willing to offer you a loan. With the guaranteed car finance, you are going to be able to purchase a car from any dealer, and any amount, as long as you are able to provide the required information, and the required down payment amount towards the purchase, when you are choosing to take out this type of loan.

With a guaranteed loan, buyers are going to be required to:

- put down a deposit sum of at least 20% of the car’s purchase price (or a sum that is equal to 4 monthly payments);
- provide their: name (ID card which is a passport or driver’s license), address, and, employment details;
- banking information (possible bank statements);
- a current utility bill; and,
- proof of current mortgage or rent payments that are made on a monthly basis.

The terms of the process may vary a bit depending on which lender you go with, but they are fairly straight forward for all buyers. The guaranteed car finance contract is an agreement for hire arrangement, where the financing company will take the ownership of the vehicle, during the duration of the loan period. A monthly rate is going to be charged by the finance company to the buyer, and in exchange the buyer has access and use to the vehicle. Finance charges plus the loan amount will dictate what the monthly payments are going to be under the terms of the contract agreement with the buyer.

While paying down the loan amount, the borrower has the duty to maintain the vehicle according to the terms of the contract for hire they have set up with the financing company. In return for lending the buyer money, the financing company gets a tax break, and the borrower will not be increasing their net asset value, due to the fact that the lender retains possession of the car during the term of the contract agreement they have entered in to.

Although different individuals tend to apply for this type of lending agreement, the loan type is geared towards buyers that:

- have poor credit scores;
- have default judgments entered against them;
- have bankruptcy proceedings that are lingering over the credit score (possibly restricting them as far as the loans they can borrow;
- those who have credit delinquencies; or,
- buyers with no credit history, who are starting to build up a credit rating, and want to purchase a car, but are not able to take out a traditional loan, due to the fact that they do not have an established credit history.

Regardless of what situation you are in, if you are having a hard time taking out a traditional car loan, but want to buy a new car, one option to consider as a borrower is to turn to lenders that are offering a guaranteed car finance loan.

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