Car Loans As An Alternative For People With Bad Credit Ratings |
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Johan Stevenson
March 9, 2013
In an ideal world, people would have spotless credit ratings. But things can get in the way, leading to a low credit score. The family breadwinner loses his job. A family member gets sick, draining the family's savings, forcing them to dip their hands into the money allotted for monthly bills. An enterprising sibling has a good idea and opens up a business but things go awry and he has to declare bankruptcy. And then there are immigrants and individuals without any credit history to speak of. The list of excuses can go on and on but the reality is, much as people would like to fulfil their financial obligations, things can get in the way, preventing them from paying off their debts.
Another reality is that people do need loans, whether to get a car to transport them to and from work, or to start a business or get a new home. Lending institutions have set up strict criteria to gauge the eligibility of those applying for loans. This is done to protect their interests from those who are deliberately being delinquent in fulfilling their obligations.
Whatever your past situation may be, there will come a time when you will need to secure a loan, like a car loan. However, if your credit rating is far from ideal, you will realize that you will have a hard time securing a loan from traditional lenders. While it may not be entirely your fault, a low credit rating is a red flag for most lenders. If such is the case, it will be in your good interest to secure car loans.
Simply put, there are lenders who place considerably less weight on your previous credit history, acknowledging that there are things that can get in the way of securing a pristine credit history.
As such, these lenders still need to protect their interests. In order to do so, individuals applying for loans should meet specific criteria. Among these is the ability to present proof of monthly income, proof of full-time employment, and proof of permanent residence as well as Canadian citizenship.
If, time and again, your loan application is rejected by traditional lending firms, then it is time to look elsewhere for alternatives like car loans. Lending firms that offer these types of loans are generally more lenient and sympathetic towards those who have low credit ratings. A time can come when your needs will not have to take the backseat despite your previous credit ratings.