Don’t let bad credit stop you from taking out an auto loan. Many lending companies can get your car loan approved even if you have no credit, bad credit or a bankruptcy. Ads for bad credit auto loans practically promise that you can buy a car no matter what kind of credit you have. Most of these ads are based on the truth, but it is best to know your options and understand how the system works.
Even with poor credit you can obtain a car loan through direct financing. The process is the same as for a good credit auto loan. The only difference is that borrowers with bad credit will have to make a larger down payment and their interest rate will be higher. Borrowers may be asked for a down payment of 20% to 50%, with interest rates of 5% to 26%. In general, borrowers with bad credit can expect to pay 7% to 18% interest. Amortization for bad credit auto loans may range from 2 to 4 years as opposed to good credit debtors whose car loans may extend up to 5 or 7 years. The upside of these loans is that they can be used to rebuild your credit.
Bad credit auto loans may be abused by some dealers who inflate their car prices or interest rates for the financing. For example, a dishonest dealer may charge $ 6,000 for a car that normally sells for $ 3,000. After taking the down payment, the dealer may finance the balance at a very high interest rate, say 24 to 26%. The borrower is left to deal with an overpriced car and a loan that is unrealistically high.
Ultimately, the borrower will end up defaulting on the loan and further ruining his credit. Or, he may end up paying two or three times the price of the car if he had purchased it from a legitimate dealer. Before you decide to buy a car, be sure to research its true value to avoid paying more than you should.
In some instances purchasing a car can be to the buyer’s advantage especially if the dealer is desperate to make a sale. Concessions may be made for a lower down payment or interest rate. This is particularly true for new vehicles financed by the car manufacturer’s own funding arm. For newer cars, the amortization period can be longer too.
With the internet, it is now easier to obtain a bad credit auto loan. The internet has a dealer network system where you can click on a site advertising car financing. You will be asked for certain information and this will be passed on to a dealer who is willing to work with someone who has poor credit. You and the dealer can work out a plan allowing you to get car financing even with bad credit.
The internet also allows multiple submission of financial information to potential creditors. You will be asked to provide in depth financial information which is forwarded to a network of lending sources willing to finance your loan. You may end up with a few lenders competing to offer you the best rates and terms.
Almost anyone will be able to obtain vehicle financing although people with bad credit and little or no down payment may find it difficult to get car financing. Don’t be discouraged if you fail in your first attempts at financing. If you persevere and improve your credit, you should be able to obtain an auto loan despite having bad credit or even bankruptcy.
Find out how to get auto loans for bad credit [http://autoloansforpeoplewithbadcredit.org/] and learn more about buying a car after bankruptcy [http://autoloansforpeoplewithbadcredit.org/where-can-you-get-cheap-car-loans/] by visiting our website today!
http://www.mintvalleyfcu.org/ Interview with loan officer Amanda Owen from Mint Valley Credit Union and TBFS Host Kevin Hunter, Author of “13 Car Buying Mistakes.” Top 7 things to know on how to get pre-approved on a car loan before car shopping. Whether you have good credit or bad credit, always start with your own bank or credit union first!
Amanda Owen from Mint Valley Credit Union, located in Longview Washington discusses the top seven (7) considerations you will need to make when you’re car shopping. They include the following:
1. Know your Budget
2. Know your Credit Score – How to get a FREE CREDIT REPORT!
3. Documents needed: Drivers License, Proof of Insurance, Pay Stubs, Debt Obligations, and References.
4. Co-Signer: Identify a good co-signer of your credit has been hurt lately, or if you have bad credit. This will save you money on interest rates, and make it possible to get a car loan.
5. GET PRE-APPROVED! This move can save you hundreds and thousands of dollars because the office a car dealer makes most of their money in happens to be with their loan officer!
6. Know WHAT kind of car or truck you want, and know what the approximate market value is. Car buyers who are informed make smarter decisions and are much better negotiators.
7. Know your Trade-in value. You can call dealers to get an approximate value on your trade before you ever set foot on a car lot.
Amanda Owen from Mint Valley Credit Union was our special guest for this interview. A special thanks to Amanda and to Mint Valley Credit Union for allowing Amanda to participate and share this important information with car buyers! Many car shoppers have no idea where to turn when it’s time to buy a car. They worry about credit scores, or wonder if they have good credit or bad credit. How do you know? This simple advice video shares with you the steps you’ll take to get a pre-approval on a car loan, allowing you to car shop with confidence.
Why is a pre-approval so important? It’s simple: If you are no longer worried about what type of financing you can get approved for, you can put your attention to negotiating the best possible car deal for you. Once you have a price for your new car and your trade-in established, you don’t have to worry about the unnecessary hassle the dealer will put you through in the finance office. Did you know that approximately 50% of all dealer profits are made after the sale of the car? That’s right! It happens right in the finance office, and unprepared car buyers get taken advantage of while signing a car contract.
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