A car purchase today is generally funded by a loan. Most of the time, car buyers prefer to take loans through the dealership as both the transactions – the car purchase and the loan transaction can be concluded at one place. There are of course other options, one of them being blank check auto loans.
When a person who wishes to buy a car, arranges for a loan with a bank or financial institution before making the actual purchase, it is called a blank check auto loan. These loans are pre-Blank Check Auto Loans.
Applying for blank check auto loans and getting them approved is very easy today as it can be done online from the comfort of once home or office. The procedure is quite simple.
After selecting an online lending site, the person wishing to buy a car has to fill in an online form with details like
Credit score – The borrower’s credit score should preferably be above 700. The greater the credit score, the lower the interest rate of the loan.
Monthly income and expenditure –Creditworthiness is not the only criteria for online blank check auto loans. The lender would also want to know whether the buyer would be prompt in paying monthly installments. So the prospective car buyer would have to disclose his monthly income and expenditure.
Approximate value of the car - Since the loan is being taken for the purchase of a car, the lender is naturally interested in knowing the kind of car the buyer plans to purchase and the approximate price of the car.
Almost immediately after filling in the form, a person will get to know whether the lender will comply with his loan request. If the loan is approved, a blank check will immediately be dispatched to the borrower.
The buyer can then finalize on which car he is going to buy and negotiate with the dealer.
Finally, the car buyer will fill in the blank check by writing the amount and making it payable to the dealer.
Car buyers who take blank check auto loans know the upper limit of the car purchase amount and would keep it in mind when actually buying the car.
When a car buyer walks in with a blank check from a car loan lender, the dealer knows that the person has a genuine intention of purchasing the car.
Often, car buyers take loans through dealerships. Dealers may misguide them regarding the price of the car or the interest rates of the loan. When a blank check auto loan is taken, there is no scope for misleading by the dealer.
Once blank check auto loans are granted, the interest rates are locked in for a specific period generally 45 days. So the car buyer does not have to worry about fluctuations in interest rates.
Approval of the loan and receipt of the blank check from the lender is instant.
Since the buyer has already arranged for funds, he has greater negotiating power with the dealer regarding the price.
If people with low credit scores apply for these loans, their request may not be granted. Even if the loan is approved, the applicable interest rate would be very high.
Lenders, especially those who lend through online sites, may hard sell these loans and car buyers may borrow without understanding the terms of the loan properly.
If the dealer gets to know the amount of the loan, he may mark up the price of the car. So it would be better to be vague about the loan amount with the dealer.
Blank check auto loans help car buyers to make their purchase with confidence without worrying about arrangement of funds. They can also take their time to decide on which car to buy as they will be charged interest only from the date the check is paid to the dealer.