Auto loan poor credit
The production of cars in the world is on the upswing. America for long the largest producer of autos is replaced by Japan. Still the American auto industry produces nearly 8 million cars despite the ongoing recession where big auto giants have tanked. One aspect of this vast production is the need to market the product. A company cannot build upon a large inventory in the present troubled auto scenario in the USA. Cars have to sell and thus there is market pressure on the selling front. Dealers and car manufacturers have scrapped the barrel as far as selling cars is concerned. This is the genesis of selling cars to people who have bad credit. Every option is used by the dealer and financer to sell cars. It will not be wrong to say that market forces have compelled to include people with bad credit in the scheme of things to sell cars. This is excellent news for people with bad credit as they also can own a car. Their bad credit will not come in the way of owning a brand new car.
Actually what we refer to as bad credit really means your credit score is low. People with bad credit having a low credit rating are said to be in subprime territory. Subprime is a financial term and means that the borrower has a rating below the average credit score and likely to default on his loans.
Subprime is not an anchor around your neck and does not mean that you cannot buy a car. Despite being in subprime territory the chance that you will get an auto loan is fairly bright. Just for information a score below 620 is considered subprime.
The definition of what is bad credit varies with each lender Many lenders can be found who will lend to people with bad credit. To be able to narrow down your selection its best to consider a survey on the net. Kindly login and surf and you will come across many lenders who will lend money to people like you who have bad credit.
However you have to be mentally prepared to pay a steep interest rate for your car loan. There is no doubt that lenders will have their pound of flesh. This comes in the form of high interest from people in subprime zone. This steep interest rate is a natural corollary and you will have to take it in your stride. Having conditioned yourself mentally to pay the high interest the chances of your getting a car loan is bright.
You might well ask why this high interest is charged. But remember that in a free market economy this is inevitable as the lender has to cover his risk of giving you a loan though you have bad credit.
The market has however accepted the fact of loan to people with bad credit. This has led to many financial institutions having dedicated department that cater to people with bad credit. Thus in case you have a relationship with a bank the chances of your getting a bad credit loan are bright. Banks value relationships and you can exploit it to your advantage.
You can also tap your credit union. Credit unions for years did not consider giving loans to people with bad credit. But now in the twenty first century there are changes and people with bad credit can get loans from credit unions as well. Thus car loans with bad credit are very much a reality.
As with all loans that are secured you will have to give some security as well. In most cases your car can be the security for the loan. In other words the loan giver has legal lien on your car. In case you default he has every right to take possession of your car. You will have to keep this in mind and see that your monthly installments are paid on time. Getting a car loan with bad credit can be used to your advantage as well. This will give you an excellent chance to repair your credit. So take this chance. The high interest and lien on your car notwithstanding. If you are diligent then there is a good chance that you will be able to come out of the red and have an improved credit rating. Once your credit rating goes up then after 2 or 3 years you can refinance the car and get a lower interest rate.