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Montag, 17. Januar 2011

vulnerable to high interest rates and bad terms.

Von chentianqi, 07:38

Bankruptcy can lower credit scores by as much as 220 points. Being a high-risk loan applicant can, at worst, prevent a consumer from accessing a much-needed loan, or, at best, make a consumer vulnerable to high interest rates and bad terms.

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Even high-interest loans can be labeled good or bad based on their terms. From down-payment requirements to early pay-off fees, loans with identical interest rates may, indeed, be very different. One of the most critical factors for high-risk borrowers is the early pay-off fee. Even a gut-wrenching payment is digestible if the borrower can plan on refinancing within two years. If the car loan charges a fee for an early pay off, then refinancing with a lower fee in mind loses it luster.

For these reasons, consumers with a history of bankruptcy should take the time to shop around for their car loan. One-stop shopping at the dealership may be convenient, but will cost in the long run. A much better choice is to spend at least a couple of days shopping for an online auto loan.