Category Archives: Auto Loans
Get Bad Credit Car Loans
You are looking for a vehicle and when you check your credit history it reports bad credit. A credit score under 600 is not considered to be good. Borrowers of this category are taken as risk among the lenders and lenders are reluctant in helping these people out. However, with time things have changed and there are a number of lenders these days that are ready to sponsor the needs of people with bad credit.
Let us see the basic qualification criteria and what your options available with these loans are.
Before applying for these loans
Before you go ahead with these loans you should get a copy of your credit report and check it thoroughly .There are times that you can find errors in your report and by getting these errors corrected your credit score can improve and you can qualify for a better interest rate.
When you take a auto loan you are required to make a down payment. The thumb of the rule is that more the amount of down payment lower would be the interest rate .So try and arrange for a down payment that is bigger in amount. Try to finance at least 7-10% of the loan amount through the down payment.
Make sure that you compare the price offered by at least 3-4 lenders so that you have an idea as to what rates you are being offered and what is the best deal that you can get. Do not just compare the interest rate on the loan. Make sure that you also compare the terms of the loan.
Before you apply for these loans make sure that your payments towards the other credits is made on time. When the lender checks your credit report they would see that you have been making the payments on time and this would add a positive effect to your loan application.
What should you be aware of?
When you take a bad credit auto loan it is advised that you look out for the terms of the loan. The loan is usually distributed over a period of 3-5 years. Make sure that the term that you get on the loan is not too strict and you would be able to pay off the loan on time.
Look at the interest rates and the other costs associated with the loan. There are a number of costs that come along with the bad credit auto loans. Make sure that you ask the lender about the other costs also .It is better to compare the APR on the loan that would give you the total cost so that you can assess how much would you pay on an annual basis towards the loan.
If you are adding payment protection insurance along with the loan then be aware that the cost of the loan will rise. However, this factor can protect you in case you are unable to meet the payment for a few months because of some reason.
What are the available options?
When applying for the bad credit auto loans you can have three different options available.
* Conventional lenders: These are the usual lenders that give out these loans. They charge an interest slightly higher than that available to people with good credit .Qualifying for this loan would be easy if you have maintained a good payment schedule over the past few months.
* Credit Unions: If you are a member of a credit union then it is advised that you take the help of union. These can be affordable and help you in getting the vehicle.
* Auto dealer: The dealer from whom you take the vehicle can provide you with an option for the finance. The dealers are in touch with a number of lenders and provide finance regardless of the credit score to their customers. However, this can prove to be an expensive deal. Hence it is advised that you opt for this type of finance only if there is no other option available.
How To Find Bad Credit Lenders
First, what is a bad credit lender?
A bad credit lender is normally a small company, not a bank, that offers loan programs to individuals or business owners that have no credit or bad credit.
Generally speaking, banks only offer loans to individuals or business owners that have good credit.
A credit score of 600 or above would be rated as having good credit.
You maybe thinking, do you have good credit? The best way to find that out is to order your credit report and score online.
Another way to find out if you have poor credit is to ask yourself:
Have you been late on your payments more than three times over the last 6 months?
Do you have any closed accounts on your credit report?
Have you ever filed for bankruptcy?
Do you have any judgments on your report?
If you have answered yes for any of the questions above, you have no credit or bad credit.
What About Loans From A Bank?
Banks are not in the business of giving individuals loans that have no credit or bad credit. If you have no credit or poor credit, you must look for companies that offer loans to individuals that have bad credit.
You would just make your credit worst by applying with a bank, because your credit score is reduced every time you are turned down.
How To Find A Bad Credit Lender?
The best way to find these types of lenders is to go online and purchase a list of poor credit lenders. I am not aware of any websites that offer this information for free.
Order a list of lenders and contact each one by phone, to go over what they can offer.
It would help if you can get a copy of your credit report before contacting a lender. This would make their job easier because you can just tell them what is on your credit report. They could immediately tell you if they can help you to get approved for a loan.
Be sure to tell each company what is on your credit report. This will save you and the company a great deal of time.
Do not apply with companies that only want to check your credit before they will talk to you.
Even if they were not willing to review your credit report over the phone, you could still ask them what type of credit do they accept. Some companies can tell you up front that they do not accept individuals that have an R9 on their credit report.
Do not apply to a lender that charges an application fee. It is illegal for a lender to charge an up front application fee. A lot of companies that charge an application fee are not lenders. They are marketing companies that are just going to send your application to a lender.
A lot of people try using their local newspaper to find a bad credit lender. This is not a good idea, because you will only find marketing companies that charge a fee to accept your application. Once you have sent in your money and application, they would forward your application to a lender.
Take the time to go online to find the best current list of bad credit lenders.