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How To Get Low Interest Rate Bad Credit Auto Loans

Only those with bad credit truly know how not so simple a task getting a loan is.  Getting a lender is one thing, getting one that best suits your needs is another thing.  The biggest disadvantage of bad credit auto loans is the high interest rate charged mainly because of the high risk the loans carry.

These rates cause many bad credit auto loan borrowers to think twice about applying for these loans. Bad credit is either due to bankruptcy, arrears, or late repayments.  A question then arises whether it is possible for bad credit borrowers to still secure auto loans at low interest rates.  The answer is yes, and this is how:

Pay a large down payment.  This is a sure way to get that interest rate reduced since it speaks highly of your capability to pay back the loan.  The confidence that this gives the lenders will cause them to easily lower the interest rate.

Provide a cosigner for your bad credit auto loan.  A cosigner is an individual who steps in on your behalf in case you are unable to pay back the loan.  Providing a cosigner especially one with good credit will automatically earn you lower interest rates.

Provide a collateral.  Collaterals act as security to the auto lender.  It gives assurance to the lender that in case of failure to repay the loan, you can sell the collateral to regain his money.  Any collateral provided must have the same value as the bad credit auto loan applied for.

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