In-House Financing Versus A Bad Credit Personal Loan

Life has thrown you a few curveballs recently, and now you’re trying to work out where to start when it comes to bad credit car financing. While there are many options to choose from, this doesn’t mean that they’re all created equal.

With everything online these days, it’s easier than you think to get approved for used car financing. We’re slowly shifting away from conventional lending options and pushing forward into smarter, more efficient choices. Not everybody likes change; however, it can be difficult to know where to begin when you need help getting approved for a car loan.

In-House Financing

In-house financing has been a popular option for people with bad credit or in need of a car loan for many years now. In fact, you will find that most retailers provide in-house financing to help their customers with the purchasing process.

Car dealerships are a common place to find in-house financing, especially because most of its business depends on customers taking out auto loans in order to be signed onto the vehicle. When a car dealership offers in-house financing, they can lock down more deals in a smaller timeframe. While this may be beneficial to the car dealer, it does have its downsides.

Let’s take a look:

  • Higher interest rates. You’ll find that in-house financing is typically characterized by loans that have much higher interest rates. This results in a big paycheck for the dealership, because they can repossess the car if you’re not able to pay it off in time.
  • Unaffordable prices. Dealerships typically encourage customers to purchase a vehicle that’s beyond the price of what they can afford through in-house financing. They also give out long-term loans through financing, which can end up costing you a lot more when you only focus on the monthly payments.
  • Additional interest. If you do have to extend the term of your loan for some reason, you will be required to pay additional interest.

    In-House Financing Versus A Bad Credit Personal Loan
    In-House Financing Versus A Bad Credit Personal Loan In Canada

Bad Credit Personal Loans From A Bank

Approaching a bank for a bad credit personal loan is another conventional option that’s been around for a while. However, just because it’s available doesn’t mean that it’s going to be the best way to secure your car loan—even if you do want to get approved with bad credit.

A bank is going to want to look at your finances before approving you for a bad credit car loan, which includes going through your credit report and checking out additional details including credit score and credit history. Of course, the better your credit history is, the better chance you have of being approved for a personal loan. Let’s look at some considerations of getting a bad credit personal loan from a bank:

  • Fixed payments. The bank will require you to pay the money back through fixed payments that must be made on time. If you aren’t meeting the requirements of your personal loan and can’t meet these payments, then the bank can take any collateral you have.
  • High interest rates. Like in-house financing at car dealerships, a bank will charge you high-interest rates, especially if you have a bad credit history.
  • Initial fees. As well as having to pay more interest on a bad credit personal loan from a bank, you may also have to pay initial fees that cover the process of being approved for the loan. This fee could be anywhere between 1% and 6%, depending on your bank.


  • Penalties for prepayment. A lot of the time, banks will charge a penalty for paying your loan back sooner because, by doing so, they miss out on the additional interest.


Bad Credit Auto Loans From LendingArch

These options don’t necessarily work for everyone. In-house financing requires you to pay a higher rate of interest for a longer term while being approved for a bad credit personal loan at the bank can incur prepayment penalties. Luckily, these two are no longer the only options when it comes to a bad credit car loan.

Beyond banks and in-house finance retailers, there are online lenders that have many different options to suit your needs. However, you may not have the time to go through them all and complete your due diligence to make sure you’re getting the best deal.

LendingArch is the lending database that you’re looking for. While you’re trying to figure out the best car loan rates Canada has to offer, they’ve already done it, through the most proficient car payment calculator Canada has available. LendingArch brings all the best offers and companies together through their easy-to-use search engine and calculator so that you can find the best car loan rates available.

LendingArch Is A Better Option
LendingArch Is A Better Option

Why LendingArch Is A Better Option

Lending Arch is indicative of the future when it comes to streamlining your bad credit personal car loan. Nobody wants to go through all the tedious paperwork only to be told that they haven’t been approved for a loan. LendingArch can find the right lender for you so that you don’t have to waste time with one that’s not going to work out.

One of the best things about LendingArch is that they cater to everyone. This means that it doesn’t matter whether you have a bad credit history or a good one—LendingArch can find the right deal to suit your needs. Through their online database, you can compare rates across different lenders that align with your current financial situation. It can help you not just with car financing, but with everything from personal loans, credit card rates, and even home insurance.

Don’t be at a disadvantage because of your bad credit. While there are many lenders out there who will hike the interest rates after looking through your credit history, LendingArch can help you find the one that won’t. Check out LendingArch’s easy-to-use car rate calculator today and say goodbye to conventional financing.

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