Posts tagged ‘0% auto loans’

How to research for 0% auto loans

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Categories: Prime Credit

Researching about 0% auto loans allows you to find out the pros and cons of this type of an auto loan. Knowing the risks involved allows you to decide whether you are capable of handling such a loan type. In addition to this, having a full understanding how 0% interest loans work helps you decide if the benefits that you could earn is worth the risk you would be taking. In order to help you do the research, the article provides you with a guide of the things that should be looked upon.

Down payment

Before obtaining a 0% auto loan, you need to research on the usual amount of down payments involved in it. This type of loan usually requires a down payment that is equal to the 25% of the vehicles purchase price. A good illustration for this is that if the vehicle costs $40,000 the loan payment involved is $10,000. Since 0% interest loans are mostly offered to luxury vehicles, you should expect that the down payment would most likely be higher.

Upon knowing the information about the usual down payments involved in these loans, you need to compare these with the budget that you have for the car purchase. Knowing if the down payment involved in this loan fits you budget allows you to determine whether you can afford 0% auto loans or not.

Length of the loan

The length of loan involved in 0% auto loans are usually shorter compared to other types of loans.

0% auto loans’ disadvantages

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Categories: Prime Credit

One of the most publicized loan offers is the 0% auto loans. The ads that promote this type of car finance tries to attract the attention of probable customers by projecting the benefits that can be obtained from this. However, there are certain disadvantages involved in this loan arrangement. This includes the purchase price of the vehicle, the credit requirements, and the length of the loan.

Credit requirements

One of the most significant criticisms thrown against 0% auto loans is its very strict credit score requirements. This type of loan is offered to creditors with good credit record. The most common credit score requirement for this type of loan is 700 as the minimum. There are also lenders that set the credit score requirement of up to 720 as the minimum. Due to this requirement, 0% auto loans are only offered for good credit holders.

This loan arrangement however does not usually offer rebates and other incentives. All you have is a loan that does not involve interest payments.

Length of the loan

0% auto loans are usually offered with shorter loan terms. The most common loan term involved in this loan could only cover 24 to 36 months. This could simply mean that the monthly payments are usually higher. You might end up having a hard time coping with the payment requirement. It could also ruin your credit record and reduce your present credit score.

Due to this fact, you might also need to compare 0% auto loans with other offers in order to determine which is better. When not carefully planned, this type of loan could possibly cause you to experience a more complicated credit situation.