There are a number of online companies that
grant auto loans bad credit. But you need to check them out
first before you avail of auto loans bad credit they offer.
You need to find a legitimate and reputable online lending company
before signing any contracts or deals. Aside from online lending
companies, you always have the option of going to the banks,
credit unions and dealerships to avail of auto loans bad credit.
Auto loans bad credit unfortunately does not
come without a price tag. You need to contend with some harsh
realities about it. You have to accept the fact that since your
credit standing is not good then you need to pay a higher interest
rate that what is normally charged. It isn?t difficult to find
a lending company that provides auto loans bad credit. What
is difficult is in paying the high interest rates they charged.
There are several types of loans available for auto loans bad
credit. One is the front-loaded interest loan that lets you
pay off all the interest first before the principal. Another
is the simple interest loan that spreads the interest throughout
the loan term. You can choose from among these types of auto
loans bad credit.
Auto loans bad credit is in some ways similar
to that of the usual auto loan because it serves the same purpose
of borrowing money in order to purchase a car. The biggest difference
lies in the fact that you are charged a higher rate. Car dealers
could charge up to 30% or more interest on car loans if you
have a bad credit standing. While those with average credit
rating, the interest rate could be between 2% to 15%.
You need to make sure first that there no
hidden charges in your auto loans bad credit also. And that
you have availed a bad credit
auto loan from a legitimate lending company. Search for
companies that provide the best auto loans bad credit possible.
Check out all your options. Also be prepared in making negotiations
with lenders who provide auto loans bad credit. Learn the loan
language. And bring with you a copy of your credit report.
Auto loans bad credit is provided by the companies
because they knew the importance of cars for people who go to
work and earn a living. If you are able to avail of a bad
credit auto loan make sure that you make the most out of
this second chance. Since the interest rates are higher for
auto loans bad credit, it would be wise to purchase a less expensive
vehicle or a used one. Once you have improve your credit standing
that is the time to buy a new and more expensive car since the
interest rates would be lower then.
You have found the car of your dreams, but
you know your credit is not the greatest. You ask yourself,
?How can I get an auto loan with bad credit??
You are not alone. Thousands of people ask
the same question everyday. Just because you have bad credit,
does not mean you can not buy that car of your dreams. When
considering bad credit auto loans, you can save yourself thousands
of dollars when you know about the options available to you.
You can get all the resources you need to
compare auto loans with competitors trying to earn your business
online. Now you can shop online from the comfort of your home.
An auto loan online can save you the hassle of many long hours
waiting at a car dealership for an approval.
5 Ideas To Help Get A bad
credit auto loan:
1. The first step is to find out what your
credit situation really looks like. With a credit score, also
known as a (FICO score) with a 500 rating it may not be wise
to get an auto loan. It may be wise to simply save money to
pay cash or at least 33% of the cost of a new car. With some
bad credit auto loans you may have up to 29% interest rates.
You can end up paying two times the cost of a new car after
interest and fees.
2. You can get a better deal if you take advantage
of buying a new car at the end of the month. Sometimes the dealerships
sales managers give big incentives to car dealership salesman.
This gives them a big incentive to get you an auto loan even
if you have bad credit.
3. Sometimes if you can find a good co-signer
to help with a bad credit auto
loan, this might be your ticket into that new car. The
co-signer has to have great credit because they are responsible
for making the loan payments if you don?t.
4. Make sure you have at least $1,200 per
month income from your job. No more than 20% of your income
can be used for a monthly auto loan payment. This can be combined
income if you are married.
5. Take a look at first time car buyer programs
available online. There are some great programs on the Internet
that can help you get into that car of your dreams.
With today?s Internet and online access you
can do a simple search on bad credit loans. You can get many
resources and tools that can help you get an auto loan. You
can buy a car with bad credit. You just need to do a little
research first. If you do research and use the tools available
online, you can save valuable time and money when you buy that
new car of your dreams.
Internet surfers with bad credit looking for
an auto loan are bombarded with advertisements most days. Many
of these ads are truthful in their bad credit auto loan options.
However, there are many things to avoid, and this article will
describe some of those.
Directly financed auto loans for people with
good credit are a bit different than those with bad credit.
People with bad credit are expected to pay more of a down payment
as well as a higher interest rate on their auto loans. Many
creditors won?t even extend an auto loan to those with bad credit.
Depending on how bad someone?s credit is, auto loans can range
from a 20 ? 50% down payment requirement, interest rates from
5-26%, and amortization (the length of the loan) anywhere from
This may sound like a lot of bad news for
bad creditors looking for an auto loan. But with some good planning
and foresight, these auto loans can actually help people with
bad debts rebuild their credit history.
The worst situations in bad credit auto loans
show up when car dealers artificially inflate the pricing or
interest rates on their cars. Auto dealers who specialize in
bad credit loans will take a car normally selling for $5,000,
inflate the price to $8,000, take a $2,500 down payment and
then finance the purchase at 24%. Now the bad creditor will
be in debt to the auto loan company for an inflated price that
isn?t indicative of the vehicle?s real value. A way to counteract
these types of sneaky bad credit auto loan dealers is to check
the value of the car you are looking at, first, and then only
pay $200-500 extra then what?s listed. Only in exceptional circumstances
would you ever pay more than this for a car.
Two different ways of selling a car have emerged
recently with the new, Internet economy. The first is called
the ?dealer network system?. Auto purchasers can get a loan
regardless of their bad credit history with this option. Essentially,
a potential customer looks at a car on a website, and then answers
some basic questions if interested in buying. This information
is then passed along to a dealer specializing in bad
credit auto loan. Since there are no fees involved, this
can be a real boon for the bad creditor looking for a decent
car loan. However, with this system, there is no way of researching
the auto dealership you are about to do business with.
The other new option is called an application
service. In this situation, a person with bad credit applies
online for an auto loan, and the financial information is then
sent to multiple lenders at the same time, with the hope that
one or two will be willing to take the credit risk. If the system
works, several dealerships with fight for the customer, using
price and convenience as their selling points.