Car Loans With Bad Credit
Changing Your Redlight to Green

Car Loans With Bad Credit
The auto industry is a highly competitive. This is why car loans with bad credit are very doable. Dealerships are desperate for business and scraping to close deals. Regardless of your bad credit history, the car loan you need is very likely for you IF you follow the tips provided in this page.

Now of course due to a bad credit rating, interest on car loans with bad credit tend to be higher than ordinary. This is to be expected. You can always renegotiate and refinance your car loan at a later time when your financial situation has improved.

First and foremost, you should obtain a copy of your credit report to be totally aware of what’s on it – and to remove any errors and dispute any items that you don’t agree with. Sometimes credit reports can include outdated items that have been on there for years and should have been dropped off by now but haven’t. Work on getting negative items removed prior to shopping for a car loan with bad credit.

If you haven’t done so already, you can get a free copy of your credit report no credit card required through this link…

One of the best things you can do when searching for car loans with bad credit is to shop around. In addition to offline resources, the Internet has become a great place to search for loans that you may have never been able to locate otherwise. There are various loan offers that you can narrow down and possibly secure in advance before ever stepping foot on a car lot.

Things to Beware of…

Zero percent interest car loans for people with bad credit are BS. These type of car loans do not exist. If you know you have bad credit and some slick dealer touts 0% interest! — then you should run the other way Fast because they are surely trying to pull a fast one on you.

It’s just a trick to get you tied up in something you can’t handle and then screw you on the back end with surprise fees and ballooned out payments — causing you even greater financial stress. And very likely it’s a flat-out scam by some fly-by-night dealer ready to zoom off with your down payment leaving you in the dust! Like the saying goes “if it’s too good to be true, it probably is”. Beware!

Also… Be sure to factor in your insurance costs as part of your car loan. You don’t want to forget about this and unknowing tip the scales way out of your financial budget. After you’ve set your sites on a vehicle – research/compare insurance rates (and don’t just go by what some car salesperson tells you – they’ll say anything to make a sale – do your own research.)

Hold off on the purchase until you’ve gotten at least 3 solid insurance quotes for the exact make & model of your vehicle. Then add the amount to your monthly car payment quote, and if you can honestly handle it along with any other necessary bills you have – Then – And Only Then – should you consider taking the final steps to secure a bad credit car loan.

Other points to consider are back-end costs like maintenance and fuel expense, which is why many people nowadays shop for gas savers.


What Car Lenders Look For


Credit History – Your credit score will be the primary factor that determines your interest rate on car loans with bad credit. If your score falls under 680 expect to pay higher interest.

Job History – Lenders specializing in bad credit car Loans also look closely at your job history. In particularly, how long you’ve been on your current job. A solid job history can open up a lot of doors for you when trying to obtain car loans with bad credit.

If you have a minimum of 1-2 years history on your current job then that a Big Plus for you! And the better your job, job title and description — the more attractive you will look to lenders. Put some thought into the manner in which you present yourself ==> Image Is Everything!

Example: Which one sounds better: A ‘Garbage Man’ -OR- A ‘Sanitary Engineer’? … Your choice of words CAN make a difference; it can paint a mental picture that can boost your image – or deflate it. “Use what ya got To get what you want!”

Monthly Income – To increase your chance of qualifying for auto loans with bad credit, it is good if your monthly income is $1500 or more. Anything less, while not absolutely impossible, may be a challenge.

Debt-to-Income Ratio – Your debt-to-income is simply how it sounds: How much debt you have compared to the income you bring home. If you have more debt than your income, then you’re in what is considered an “upside down” state. If this is so, you need to seriously work to reverse the situation and get back on your feet again. Paying all your debt down at least by half will surely improve your debt-to-income ratio.

Down Payment – Car loans with bad credit will usually require 10%-20% of the purchase price of your car as a down payment. If you have even more to put down great ~ Money Talks! If you have a large enough down oozing out of your pocket this could definitely help to increase your car buying options.

Coming with a sizable down payment can enable your monthly payments to be decreased and your interest lowered. It might also shorten the length of your loan as well.

References – Make sure you have at least eight to ten solid references that you have known for at least a year. A mixture of personal and business references is advised. This is what lenders consider third party verification i.e. what others have to say about you. Seeing that others are willing to vouch for you adds an extra sense of trustworthiness and credibility to you as a person.

Car Loans for Bad Credit

“Don’t Put the Cart before the Horse”

You should first locate promising car loans for bad credit and then secure your loan BEFORE you choose your car. Yes before. You may not be able to get your “dream car” due to your current bad credit situation; that’s not what’s it’s all about anyway.

This second chance auto loan is an Opportunity for you to rebuild your financial profile and then later on you can upgrade to a better automobile IF can see that you can handle it without losing your financial footage again. You might have your eye on one brand of auto, but if financing comes through for another that is a little less desirable for you – then it may be wise at this point just to go ahead and take what you can get as long as it’s decent.

Securing your car loan with bad credit first will help keep you in check. It is actually a good thing for your situation because it forces you to make rational decisions and to live within your means. Remember: This is a strategic “Do what I gotta do right now” Move so that you can rebuild your credit profile. Eventually you’ll graduate to a better position later on.

Also keep in mind, you don’t have to get a brand new car. There are some good used or “pre-owned” late model vehicles that you can own. Being that cars depreciate an average of 30% in value the moment they’re driven off the lot — You may be able to find a fairly new vehicle at an Amazing Price!

Enhanced by Zemanta

Be Sociable, Share!