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June 15 2016


Credit Scores and Car Loans

Many people opt to procure car loans because doing so lets them obtain vehicles that they want at a price that they can pay for without great financial burden. However, as individuals are exploring the world of buying used cars with Carro, they begin to do some calculations. During this process, they may realize that they do not fully recognize all that is factored into a car loans rate. Some assume that the loan amount is the same for everyone buying a particular model of car and putting the same amount of money down, but that is not the case. Credit scores play a significant role in car loans, and that is a reason for individuals to work on improving theirs.

Allen Baler

Credit scores can determine whether or not people receive approval for car loans in Singapore in the first place. Individuals who plan to loan out a car in the near future should look into their credit scores. They will have a better idea how likely they are to receive approval. These people may want to call potential dealerships that they might buy from too. Then, they can find out what the dealership's policies are in terms of credit scores. When people discover that their credit scores are too low to qualify at that particular dealership, they should not give up. Opportunities for car loans still exist; they may need to work with entities that specialize in poor or no credit sales, however.

Not only do credit scores affect whether people are approved, they also play a role in the price. Individuals who want the lowest car loan rate usually need to have high credit scores. At the negotiation table, the offers that potential buyers receive are usually reserved for those who have the highest level of credit scores. Once they undergo the credit check, they may discover that the price becomes higher because their credit scores are lower than expected. Asking questions about this price and process is imperative before signing any paperwork.

On top of seeing a higher monthly payment for the car when lower credit scores are the case, individuals may also be subject to higher interest rates. In most cases, lower credit scores mean higher interest rates. Individuals who are in this situation might want to find out if they can refinance the loan in the future when their credit scores are better. Doing so can potentially earn them a better rate at that point in time.

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