Three things to know about 2nd chance credit financing
April 30 2022,
You've probably heard of second chance credit financing. You may even have needed to use it at some point in your life. For many who are less knowledgeable or who don't have all the information, however, 2nd chance credit financing may be considered a bad solution, but that’s not the case.
Obviously, this type of financing requires certain concessions. It is more expensive in terms of interest, it is less flexible and the terms are longer. It is obvious that this type of financing is not as advantageous as traditional financing.
However, even if this type of financing is more expensive and even if the interest rate is higher, the fact remains that it is the only and therefore the best solution for certain consumers who have experienced credit problems in the past. It is also a way for you to rebuild your credit.
With that in mind, here are three things to know about 2nd chance credit financing.
- Many buyers use 2nd chance credit financing
The reason 2nd chance credit financing exists is because many people use it to buy their car. Credit problems can happen to anyone, and there's no shame in that. With 2nd chance credit financing, it is possible to buy the car we need despite our credit score not being where we want it to be.
- It can help our credit
Once we are back on our feet after credit problems, we need to show financial institutions that we are able to meet our commitments and payments. To do this, we need credit. If we have no credit, how can we show the banks that we are back on our feet financially? With 2nd chance credit, you show that you can meet your obligations which in turn improves your credit and leads to better financing rates.
- 2nd chance financing still offers reasonable rates
Some experts like to talk about crazy interest rates when they talk about 2nd chance financing. We often hear about rates of 10, 15, or even 30%. In reality, the rate will depend on your credit history and the financial institution that is lending you the money. That said, you will rarely see the kind of interest rates that we hear about in the market.
Come to Scarboro Mazda today to learn more about our financing offers including our 2nd chance credit financing. We will be able to help you find the right financing plan today.
