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Used Auto Loans – Everything You Need to Know

Nowadays, car prices are steep. That is why a lot of people opt for hand-me-down cars. While the concept of saving a lot of money on these used cars is attractive, it is also good to know that there are available used auto loans for used car acquisition.

If you think there’s a discrepancy between new and used car application, the answer is a big ‘No’. Applying for a used auto loan is one and the same as applying for a new car loan.
To provide you with more weighty information, you can follow these simple yet superlative guidelines. Read on.

• Lending institutions are oftentimes picky when it comes to this matter. One of their conditions greatly relies on the model and year of the car. Since most of these lenders do not see the value of a 5-year or older vehicle, finding a lending institution to finance cars like these would be a bit intricate. So, before you get into refinancing, ascertain that your vehicle is not old enough to meet the standards of lenders.

• Search for different lending institutions that specialize and cater to used auto loans. There are a lot in the market such as Capital One and First Again among others who give importance to those car owners buying directly from dealership or private sellers. So, never entertain the thought of near-impossible used auto loans, they are aplenty and all you do is choose which one is the best.

• Make certain that you have all papers and documentations available. This is considered standard operating procedure when applying for a loan. Just imagine how a borrower’s application can push through without these requisites. Therefore, ensure that you have primary and supporting documentations to back up your application. These are just marginal requirements such as your social security number, proof of employment, salary report, and most importantly, details about the used vehicle.

Auto Loans

With the economy being slow, it is harder for people with all credit ratings to get auto loans. Auto loans for those with good, bad and fair credit are declining, due to the stricter guidelines for auto loans from the economy& 8217;s downfall. Banks are becoming more selective when it comes to approving the financing of new or used autos, considering the sizeable losses that many have previously taken due to nonpayment.

Bad Credit Auto Loans

Look at your credit history to determine what type of credit you have. It is a hard task indeed for those with bad credit to find financing for a vehicle, even when the economy is in better standings. The biggest concern for those with bad credit is not finding a vehicle you like, but finding one you can afford and actually get auto loans to pay for. Many dealerships will offer financing through a company they normally work with for those with bad credit. There are criteria that have to be met for you to become approved, so you should not assume you will be approved even if the car lot or dealership says that you will. Review your own history to know about your credibility.

Finance companies look at outstanding accounts, revolving accounts and repossessions. The number of closed accounts in good standing should be higher than the number of accounts open in bad standing at all times. With bad credit auto loans, you can expect to pay a higher interest rate, and have higher payments than with any other auto loans. The reason for this is that the finance company feels that those with bad credit are at a higher risk of not paying back the loan. Find financing prior to looking for a vehicle, so that you know how much you have to work with, and where the loan will be accepted.

No Credit Auto Loans

Those with no credit have as hard a time finding auto loans as those persons with bad credit. This is due to the fact that when the credit history is pulled from the major credit reporting agencies, there is no information. The finance companies or banks have no prior information to make a decision on, and therefore most of the time will require a cosigner. The cosigner must have good credit and be willing to pay back the auto loans if the other signer does not pay. No credit history would mean simply that there have been no credit cards used or owned, no loans of any kind including student loans, and no revolving credit from chain stores such as electronic or department stores. If approved for auto loans with a cosigner, you can expect to pay a slightly higher interest rate because of the lack of history for a company to make a decision on and therefore you may be a high risk customer.

Good Credit Auto Loans

Those with good credit rule the world. With good credit you are able to obtain auto loans through most banks and finance companies with a small down payment. Interest rates can be quite low, and if taking advantage of a financing promotion, those with good credit can even have part of their loan forgiven over a period of on time payments.