Sizable Monthly Payments
Since high-risk loans carry high interest rates, expect to pay bigger monthly payments.
But what others do to reduce the amount they ought to pay every month is extend the loan term. Choosing a longer loan term does cut the monthly payment. But that’s only superficial.
You can do the math now to realize that you’ll be paying more over time. You don’t have to wait for the term-end to see that.
If you really need a car right now and can’t afford to spend some time improving your credit, make sure you are earning enough to make the payments on time. (And yes, you’re reading it again.) Missing a payment only worsens your credit standing.
Little to No Flexibility
High-risk auto loans have very little flexibility in payback terms. They usually require prompt payments while regular car loans allow a grace period. Moreover, most high-risk lenders charge crippling late fees even if the payment is just a day late.
Prescott Financial is also accepting auto loan applications from people with less-than-perfect credit. But we want you to improve your credit through our financing programs. This is why it is our pleasure to create a flexible payment plan that suits your financial situation.
How to Improve Your Credit with a High-Risk Loan
Even though high-risk loans come with high interest rates and strict terms, a lot of borrowers are able to use these to rebuild their credit. Let us give you a couple of ideas on how to improve your financial portfolio.
1) Find a lender that offers agreeable terms and conditions then comply with them 100% throughout the loan. Make your payments on or before the due date to make sure your payments are always on time.
2) Add extra money to your payments in order to pay the loan off early. But before you actually do that, ask your lender if you can pay the loan off early. Some lenders penalize borrowers who complete their payments ahead of schedule. The penalty is called Prepayment Penalty which usually translates in a hefty amount.
With all that said, realize that you can begin with high-risk auto loans to restore your credit and have a personal means of transportation at the same time.