Should you choose a subprime loan or rent-to-own? Both are great options but subprime loans come at a higher price. Learn about the key differences here so you can make the best choice for your budget.
Subprime Loans Help Boost Your Credit
If you have bad credit, subprime auto loans can help you boost your credit score. When you take out a subprime auto loan, you make timely payments on your car, which are reported to the credit bureau. By the time you complete the car loan, your credit score will have also increased, which will help you if you need to take out future loans.
The downside, however, is that the process can be complicated. Subprime lenders are third parties, so you’ll have to find a special finance dealership to help you out. You’ll then have to put down a high downpayment and sometimes go through a lengthy application process to prove that you can pay the loan.
Rent-to-own options usually do not have a high down payment and the process is fairly simple. For example, Earn-A-Car’s rent-to-own options have an easy online application process. You will have to pay an affordable administration fee, but no large down payment is necessary.
Subprime Loans Have High Interest Rates
Although its financing options sound like a good idea, subprime loans also come with high-interest rates. If you are struggling to make monthly payments or are on a tight budget, this may not be the right choice for you.
Rent-to-own options, however, give you more flexibility with your monthly payments. You get to choose the car and monthly payment option you can afford. If you can’t make a payment for any reason, you can choose a lower payment plan by speaking to the Earn-A-Car team.
You Have Better Odds With Rent-To-Own
Although both options don’t take your credit history into account, it’s easier to get the car you need (quickly) with rent-to-own options. Subprime loans rely on your payment history and other documents to ensure that you can repay the loan. Rent-to-own options only need your ID, driver’s license, and proof of employment. All you need to do is show us that you can make your monthly payments. You also get a choice of whatever vehicle you need, including Toyota Etios, Suzuki Ignis, Nissan Micra, VW Vivo, and Renault Sandero.
Leave the stress of subprime loans behind and give our rent-to-own team a call today!