Over the years, we have run into literally hundreds of customers that have asked us if they should go to a payday loan company in order to have more money down for their car purchase.
For the vast majority of people, it is a bad idea. You might as well be putting the down payment on a credit card. Taking out more debt in order to get a loan doesn’t sound like a surefire success plan when it comes to rebuilding your credit.
I did have a customer once that it sort of made sense for.
Her name was Linda. She had a long term job, and was a single mom.
Linda’s credit was shot because of a divorce, and her bank account was small because of her kids.
Linda had an old Ford Taurus that reliably got her to and from work every day. That was until her car got hit by a drunk driver. Thankfully, neither Linda nor her kids were hurt. However, her car was totaled and she only had liability because she was trying to cut back on bills and it was an older car.
Linda needed a car, FAST, and while she waited for the drunk driver’s insurance to work everything out with her lawyer, she had no way to get to or from work. Now, it was obvious to everyone that a pretty large settlement would be coming to Linda from the other party in the accident. The only issues were how long the wait would be and how much she would get.
Linda came up with the idea to get a 100 day loan from a payday company by calling 877-793-5212. She did not get crazy with the loan amount. I think she only borrowed $1500. With the $1500 down, she was able to buy a vehicle that was reliable and got her to work while the settlement was worked out. She paid the loan back, got her settlement, and paid her car off in full. No more payments.
One thing she does do now, though, is keep full coverage insurance on the car.
If you are thinking about obtaining a car loan, and using a payday loan, credit card, or some other form of debt for your down payment, it is important that you consider a few facts. For starters, most lenders frown on you taking out additional debt just to buy a car. The ones that are okay with it only allow it when you disclose the new debt ahead of time so that they can factor in what your true monthly debt will be. It could cause them to turn down your loan. It could result in a higher interest rate. It could also result in a smaller approval.
So, now that you know the facts surrounding obtaining a new debt in order to have down payment for a car loan. We really do not recommend you take out a loan for down payment. If you need a payday loan, you could try calling a payday loan company at 877-793-5212.