If you have bad or damaged credit, chances are that you find it difficult to obtain financing for the vehicle that you need. Bad credit can happen to virtually anyone – if you fall behind on just a payment or two, your credit score can plummet to the lower rungs of the credit ladder. If you need to buy a vehicle but have poor credit, you might consider a private party auto loan to put yourself behind the wheel and moving down the road, fast!
|Click on our Advertisement
Private Party Auto Loan Options
A private party auto loan is also known as a person-to-person auto loan, and is available for the purchase of a car, truck, SUV, or van from the actual owner of the automobile, rather than from a dealership. The terms of a private party auto loan usually run for up to five years, although you can get terms for as little as three years – depending upon your needs.
You may or may not be required to offer a down payment against the total price of the automobile – paying a down payment can make your monthly payment less and your interest rate lower, however. The interest that you pay on your private party auto loan will be comparable with other interest rates for those who wish to purchase a vehicle with bad credit – which means you can expect to pay elevated interest as compared to those with good credit.
Advantages Of Private Party Loans
One of the major advantages of buying a vehicle from a private party is that you can inspect the vehicle in greater detail, learn the vehicle history from the owner, and find out more about the maintenance the owner performed during ownership of the vehicle. These are things that dealers usually do not know much about when you are dealing with a typical car dealership.
As a consumer, you also have better bargaining power when dealing with owners rather than fancy car dealerships. Oftentimes, the owner of the car or other vehicle is more willing to let the vehicle go for a fairer price than a dealership would.
Borrow $10,000 Or More
Private party auto loans for bad credit typically start out at around $5,000 and can go up to $10,000 or more, depending upon the vehicle you are buying and your ability to repay the lender. Never agree to a monthly payment amount that is above what you are truly able to pay your lender – this can only end up with you getting behind on payments and worsening your credit situation.
You might consider shopping online for a private party auto loan. There is an increased level of lending activity online because of the financial crisis – more people are turning to online lenders because they tend to approve more borrowers, especially those with damaged credit. In addition, online lenders can offer you more favorable repayment options that will help you better manage your monthly payments.