23rd
02 -
2010
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no comment »
If you have a bad credit rating then you may well find that your experiencing in raising a loan in order to purchase a car is not as positive as you would really prefer. You see a significant part of the problem is that if you do have bad credit then there is a good chance that then lender you are dealing with will classify you as a dreaded sub-prime borrower. This never used to be a problem, back in the days of the good old credit bubble. But all that ended with the collapse of Lehman in the fall of 2008. Now sub-prime borrowers are having a much more difficult time of things. So the question is can you still get car loans for people with bad credit or not?
The short answer to this question is, yes, you should still be able to borrow money in order you buy your preferred auto. However, as you might expect the longer answer includes a number of provisos which make the longer answer more like, it depends!
Firstly, in order to increase your chances of taking out car loans with bad credit you really have to be thinking about purchasing a car which is less than 5 years old. This does seems nonsensical, as in order to purchase a newer car you will almost certainly have to borrow more money, but the lender doesn’t really care about that. They only care that if you happen to default on your auto loan then they can recover some or all of what you owe from repossessing the car and selling it off quickly, most often at some form of auction.
Next, beware of the auto dealer loan deals. They are rarely as good a deal as they seem. Remember you are residing in the territory of need car loans with for people with bad credit. You do not want to fall foul of the seemingly great auto loan deal advertised all over the dealers premises showing a really low rate of interest only to discover that a year or 18 months down the line the interest rates ratchets up sharply and you can no longer afford it. Getting into more financial difficulty when you already have bad credit is something you really need to avoid.
That’s not to say that all auto dealer loan offers are bad. Just don’t fall for the first one you see. It may be good for the dealer, but not so good for you. Look around. Get some comparative quotes so you know what you can end up paying. Try banks and credit unions for some idea of what they would charge you. It could be really important that you do so.
Using car loans for people with bad credit can be really useful if you are also trying to repair your credit score. Remember, if you take out a loan and repay it on time and in full then your credit score will lift. This could make your life a lot easier. Whilst car loans with bad credit are never going to be cheap they are also likely to be lower than unsecured loans so it may well be a worthwhile exercise and you get both a new car and to start the process of credit repair.
18th
02 -
2010
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no comment »
Much as you might fear that your bad credit history will be an impediment to getting a loan with which to purchase a car, you might actually find the process a lot simpler and therefore less unpleasant than you realise. Car loans with bad credit are possible due mainly to the fact that the lender secures the loan on the vehicle that you are buying and as a result they consider that in the event that you default on the repayments of their loan they simply have to repossess the auto, sell it and recover their money through the alternative route. This is not to say that this is their preferred route. They make much more money from you if you continue to pay and repossessing a car is a lengthy and bureaucratic process that they would much rather avoid.
The lending industry is set up to be convenient for the lender, even lenders looking for car loans with bad credit, to have easy access to the application process. In order to apply you need only have access to the internet. After that the process can, to the extent that any application to borrow money is able, be a relatively quick and painlesss process. You will need to provide a number of items of essential information. At the very least you will have to provide personal information (your name and address and date of birth), some information about your current employment and some aspects of your employment history (remember the lender is trying to corroborate you with your ability to repay their loan), the loan amount and some details as to the type and model of car that you are looking to purchase.
At this point it is worth noting, especially if you are not already aware, that a bad credit history will have consequences any time that you borrow money. The reason for this is, as has already been discussed, the lender will see you as representing a greater risk of taking their money and not repaying than they might view someone who has good credit. This is just a fact and does not reflect at all on you as an individual, it simply reflects that additional risk that the lender sees it might be taking in dealing with you. The consequence of this is that the interest rate that you are likely to suffer will almost certainly be higher that you might otherwise get if you had good credit. You may also get charged loan arrangement fees that the lender would waive in the event of you having a better credit standing.
Once made, the application can be approved quite quickly and you will be able to go ahead and purchase the car you desire. Once done so you simply submit details of the car to the lender who completes the paperwork and secures the loan against the vehicle. After that you can jump in the car and have fun.
There remain some additional details, but in essence the process can be as simple as described. Your credit history is only a partial impediment, as discussed, but hopefully you can see that car loans with bad credit are not only possible but relatively easy to secure if you set your mind to the process.