The world of automotive financing can be dark and confusing, especially for those who aren’t savvy in their terminology. On top of that, misinformation is easy to come across and is often spread by those who don’t understand it themselves. Here are a few common financing myths that hold no truth in the modern automotive industry.
This myth is false in every aspect of its meaning. You don’t need a higher credit to get a loan. In fact, you don’t need a credit score at all. In order to qualify for a loan, all you need is proof of income.
The difference between a low and high credit score lies in the interest rates and approvals. While both credit scores can get a loan application approved and secure financing, the borrower with a high credit score will enjoy a lower interest rate. Those with lower credit scores represent more of a risk to the lender, so they’ll pay more in interest over the course of the loan.
In the past, financing wasn’t nearly as available as it is today. A wider selection of competing lenders, more dealerships, and manufacturer financing have opened the door to almost anyone who wants to buy a car. Even if you can’t put thousands upon thousands as a down payment, you can still buy a car.
In the long run, all a large down payment does is reduce your monthly payment and decrease the amount you’ll pay in interest. A down payment can also help those with low credit scores secure a loan.
Used cars are particularly easy to buy, even if you don’t have a down payment. Since they’re more affordable, the payments are often lower to begin with.
Check out the selection of affordable cars currently available at Pollard Used Cars of Amarillo!