Types of Auto Financing

There are several types of auto financing and they include:

1. 0% Auto financing: This is a loan is free of interest payments, and it has to be a short term loan of 24 or 36 months. In order to qualify for it one needs to have a high credit score of 680 and above and therefore, this type is financing is limited to people with good credit ratings. A disadvantage is that this financing is offered to the dealer’s type of vehicle and therefore, as a buyer one is limited to buy from what is on the lot. One also looses out on the cash rebate, as it is either the 0% interest rate or the rebate. It is good to note that the payments will be higher but the loan is paid off relatively quickly.

2. Graduate plans: There are some manufacturer’s who are offering car loans to recent college graduates. This, however, may be restricted to particular models of cars and the dealer’s stock. Recent for most manufacturers is usually the last two years.

3. Internet Auto financing: This is a recent development and all you have to do is fill out the auto financing forms and submit them online. The response is within a couple of days and because of the use of internet, one can negotiate for a better interest rate. It is also very convenient as it saves a lot of time.

4. Guaranteed Auto financing: This type of financing is guaranteed meaning that the credit scores of the buyer and credit history and financial situation is not put into consideration when granting the loan. This type of loan is repaid weekly. However, this my come at a cost as there are other fees and payments associated with it such as demand fees and penalties.

5. Bankruptcy Auto financing: It is not easy to get financing with a less than perfect, but it is possible. One has to ensure that their credit report is accurate as errors could jeopardize the chances of the loan. This is usually offered by car loan lenders who work with financing partners to offer loans to people with varying credit risks such as bankruptcies.

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