Thursday, April 19, 2018
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Automobile Financing through Consumer Portfolio Services

People with poor credit histories, no credit histories, or low incomes will not be approved for traditional bank and credit union automobile loans. They still need a vehicle to get back and forth to work, pick up groceries, and other essential errands. There are a few options that can be explored.

What to Do

It may be possible to find a private seller with a used car for a few hundred dollars. That amount of money can be saved or borrowed from a family member. That will solve the immediate problem, but will end up causing more issues within a short period of time.

Unless you know how to complete car repairs, that great deal may cost much more money in the long run. People often do get exactly what they pay for. That cheap vehicle may run for a few weeks or a month before something will break or malfunction.

Alternative Lenders

Specialty financing companies, such as Consumer Portfolio Services, provide direct-to-consumer financing in some states. The majority of their financing services are provided through dealerships, but a small division provides direct loans. The process is fast and easy. The application can be filled out online, with an answer available in a matter of a few minutes. If approved, a loan package will arrive in a day or two. Send back the information requested and go car shopping.

Interest Rates

The interest rates for financing will be quite a bit higher than bank interest rates. Given that a bank will not grant approval, a higher rate is a small trade-off. Maximum rates and late fees are dictated by each state. In Missouri, for example, the maximum interest rate is twenty-six percent. Compared to fast cash installment loans, that interest rate is actually low.

The important aspect to keep in mind is not to take out a loan that will be a hardship to repay. Figure the payments into the budget and determine if there is enough income to cover the total cost of owning a vehicle. There will be fuel costs, insurance payments, and maintenance to consider. Be smart, and do not set yourself up for a vicious cycle of debt.