With a manifold of loan instruments on the market, the car buyer has many choices in purchasing a car. At many car dealerships a car buyer can put a down payment towards the loan and get a car of his selection. The higher the down payment the lower the interest rate, monthly payment and contract of the loan.

However, if one were to purchase a car with no money down, then they will have to seek a no money down car loan. In such cases the total money financed from the loan is seek to cover the car whether it is used or new.

There are two options in getting a no money down car loan: Secured or Unsecured Car Loan.

Secured car loan

The secure car loan case usually depends on the buyer presenting a collateral as security against the loan. So, in case of a default the loan lender can seize the collateral up to the full value of the loan.

Because the loan is secure the terms and conditions are flexible and the interest rate may be lower, thus a lower monthly payment and lower cost of the loan.

Unsecured car loan

In the case of the unsecured car loan, the car buyer does not have to present collateral for the loan value. However, the interest rate can be higher, the term of the loan less flexible and the final amount of the loan can be higher. Although, if you have good credit the interest rate can be as low as 6% depending on your job status and financial situation

The unsecured car buying is more likely to face the threat of repossession of the car if he or she does not pay monthly payments within a few days as stipulated in the contract.

In many cases the car dealer work with banks and other financing institutions to finance the car. However, the car buyer can also seek quotes from many car loan financiers online at the no cost.

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