Bad Credit Car Loans are specially designed for people with a poor credit score. This can be because of the defaults made in the loan repayment or CCJ or even bankruptcy. It is normally difficult for such people to get a loan to buy a car. But nowadays, bad credit car loans are available which suits to the situation of a bad credit borrower.

Before applying for the loan one has to check the credit score. If the score is lower than 450, then he could avail only this type of loan. The loan can be availed if he is a resident of UK and have completed 18 years of age. He should have a permanent employment with a good salary and shall have a valid bank account.

There are two types of bad credit car loans. These are secured and unsecured loans. The secured loans require a collateral and is of lower interest rate. But if the borrower fails to repay the loan, he will lose the collateral.

The loan can be applied online, but one has to pay higher interest rate, repay fast and involves greater down payment. The down payment will be usually 25% to 50% of the loan amount and interest rate will 6% to 8% higher than normal loans. It has to be repaid in 2 to 4 years time.

Some tips to get the best loan are as follows.

1. Get a copy of the credit score.
2. All the bills have to be paid on time.
3. All the accounts have to be complete.

Only one loan shall be taken at a time.

This entry was posted on Tuesday, October 21st, 2008 at 3:37 pm and is filed under Car Finance. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.