When you have a bad credit score, it is like your chances of getting different options for your financial services needs are narrowed down, if not at all zero. You would not have the luxury or the freedom to possibly have your own credit card, or buy your very own home through house financing and loaning, or getting approved for a mortgage, or even buy yourself your very own car through applying for a car loan. Sometimes, having a bad credit score is not even your fault. Sometimes it is only because you have not built your credit score yet, so you have no score
Loaning vs Leasing
These days, having a bad credit score is not really that negative anymore because there are already financial institutions which cater to loaning out and leasing out houses or cars to people with bad credit. Because of this, you might actually wonder whether if it is better for you to apply for a bad credit loan and buy yourself a car that you would owning, or go with a leased car with your bad credit, right? First of all, because of your bad credit, whether if it is a loan or a lease, you would still get a higher interest rate on your monthly repayments compared to those people with a good credit standing. So is it better to loan or to lease when it comes to acquiring a car? Loaning has a longer time commitment opposed to leasing out a car for around two or three years. When the time comes that you no longer need a car to drive around, you could easily be done so once your lease expires. A car loan however, you have to pay off (with an absurd interest rate at that!) for five to ten years down the road.
Lower Payments in Less Time
When you lease out a car, you would also be lucky enough to pay for lower monthly payments for two to three years, compared to your monthly loan repayments when you buy one. This is because you would not have to pay for the whole amount of the car – you just have to pay for the amount that you would use it along with the depreciation value for the number of years you have it on lease. When it comes to expenses, a leased car would also have lower expenses you would need to shell out throughout the years that you would use it compared to a car you would eventually own.
Hassle Free Car Use
When you own a car, you would have to think about getting an insurance provider, paying for maintenance every year or so, preparing for repair expenses should the inevitable come, and sometimes even paying off third parties when you get into an accident with them. With leased out cars, you do not have to worry about any of that! Since most leased out cars are brand new, they still come with a manufacturer’s warranty that you could use to your advantage. You would not need to shell out when it comes to the maintenance of the car and if the A/C suddenly breaks down? You do not have to worry! The warranty will have it covered and you can enjoy driving the car in a jiffy.
Improving of Your Credit Score
It would be a whole lot easier to improve your credit score should you get a leased out car instead of a car loan should you have bad credit. Not only is it cheaper, but it is also faster to pay out. When you consistently pay off your monthly repayments every month on time and in full amount, you would easily be able to increase your credit score and possibly end your lease on a good credit standing. If in the future you would prefer to have a car of your own, it would be easier to actually apply for a car loan with your newly earned good credit score. Not only will you be able to get better interest rates, but the payment schemes might be easier to comply with as well.