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What is a Bad Credit Loan?

Posted on Dec 17, 2012 by Albano Stefani

Like millions of Americans across the country, you might be struggling with a few debts on your credit report. Having these debts could easily lead to a less than stellar credit score that can greatly impact your ability to borrow money and finance purchases. Traditional sources such as banks and credit unions will most likely be reluctant to lend money to someone with a bad credit score.

 

A bad credit loan is simply a loan offered to those with bad credit scores and credit histories. This includes having a history of slow or missed payments, bankruptcy, defaults and arrears. There are two types of bad credit loans that are available:

 

  • Unsecured personal loans – These loans are based on the credit score of the applicant. Those with a very low credit score may need another person to co-sign the loan or put up collateral, usually in the form of real estate or other valuable property.
  • Secured loans – These loans differ from unsecured personal loans by requiring an advance deposit, which is held in escrow until the loan is repaid. When the loan is finally repaid, those who took out the loan not only get the deposit back, but they also have the option of switching to an unsecured personal loan or another line of credit in the future.

 

Other types of bad credit loans include car title loans, where you use your car’s title as collateral and payday advance loans, where you borrow against your incoming paycheck.

 

Keep in mind that while most bad credit loans are legit, there are some companies out there that are ready and eager to scam unsuspecting customers. Careful and thorough research is the key to avoiding many of these scams, plus it gives you the upper hand when you speak to a genuine bad credit lender.

Bait and Switch: What It is and How You Can Avoid It

Posted on Oct 16, 2012 by Albano Stefani

Deciding to buy a car is a difficult time. One of the most difficult parts of the process is getting approval for a car loan. In an ideal world, it would not be that bad, but for many people the process is mind-blowingly difficult. One thing to be aware of when you are applying for a loan at a dealership itself is watching out for the bait and switch technique.Bait and switch car loans

 

This issue in car loans occurs when the lender offers you a certain type of car loan, usually with a good rate and with enough financing to get you the car of your dreams. Usually the dealership will let you drive the car off the lot that day, telling you that you can come finish up the paperwork tomorrow. The idea in this is that you truly become committed to this car.

 

The next day, or a couple of days later, you will get a call from the dealership telling you that they could not get you qualified for this financing. At this point, you are normally offered a car loan that has terms that are not as favorable. You will then have to decide what to do—keep the car and pay more, or keep looking.

 

 

This is why securing your auto financing ahead of time from an independent financer is normally a good idea. Check around for other options before you commit to getting your funding directly from the dealership.

 

How to Get a Good Auto Loan with Less Than Perfect Credit

Posted on Sep 27, 2012 by Albano Stefani

For many Americans, the chances of finding a good auto loan are extraordinarily slim. According to Mark Whitehouse of the Wall Street Journal, 25 percent of Americans have a credit score of less than 600. Bad credit habits, temporary loss of employment and unexpected life events can all contribute to a credit score that isn't as pristine as many Americans expect. Nevertheless, an unfavorable credit score shouldn't prevent you from finding an auto loan that meets your needs.

 

Bad credit auto loansMaking Preparations

 

There are many things you can do to prepare yourself for applying for an auto loan. Many of the following points can also help you raise your credit score, which can improve your chances of finding a good auto loan.

 

  • Get a copy of your credit report and make sure it offers accurate and up-to-date information. Having a mistake on your credit report can easily knock down your overall credit rating.

 

  • Pay off your debt. The leading cause of a poor credit score is often having significant amounts of debt from credit cards and other existing loans. If it's possible, focus on paying off those debts before pursuing an auto loan.

 

  • Shop around for better interest rates. The average interest rate for those with bad credit ranges from 10 percent to 20 percent. Interest rates can vary between lenders, making it a good idea to shop multiple lenders.

 

In many cases, bank loan officers are willing to work with those with less than perfect FICO scores on a case-by-case basis. It all depends on your particular circumstances and your relationship with your current bank can also be taken into consideration.

Obtaining an Auto Loan After Bankruptcy

Posted on Sep 18, 2012 by Albano Stefani

Dealing with bankruptcy is nothing new for most Americans. According to the American Bankruptcy Institute, over 1,362,800 Americans filed for personal bankruptcy in 2011. Unfortunately for those looking to buy new or used car, having a bankruptcy or any other type of financial trouble on their record usually means losing out on most auto loans, especially those that offer low interest rates.

That's not to say that bankruptcy makes getting a good auto loan impossible. Finding a lender isn't as difficult as you think. In fact, here are a few tips that will make your search for a post-bankruptcy auto loan that much easier:

 

  • Bankruptcies carry the most weight during the first year after filing. If you can afford to wait a year or two, you’ll have a better chance of finding a great auto loan.
  • Focus on rebuilding your credit. Cleaning up your credit report with a history of timely payments and responsible spending can do wonders for your chances of finding an auto loan at great rates.
  • Shop around for the best interest rate possible. Although many people who’re emerging from bankruptcy often run into loans requiring large down payments, high interest rates or both, today’s recovering economy is making some lenders more anxious to take on “high risk” customers with more competitive rates.
  • Consider having someone co-sign the auto loan. Having a co-signer on board reduces the amount of risk to a lender.

Keep in mind that a bankruptcy discharge issued by the court may be necessary to obtain financing, in some cases. A discharge calls for all dischargeable debts to be zeroed out on your credit report, which could give you a significant advantage when shopping for a post-bankruptcy auto loan.

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Bad Credit Auto Loans

Shopping Online For Auto Lenders

Posted on Sep 07, 2012 by Albano Stefani

Wondering whether buying a car is easier than it used to be? Today, more people are searching for the best auto loan and some are finding it online. Car sales are improving since the auto industry bailout in 2011 and according to CNN , the U.S. auto industry's recovery continues to be a success.

With news of improving sales and good interest rates, people are once again shopping for new and used vehicles. There are a few tips to consider in order to to secure the best deal for the dollar.

 

  • Interest rates are less on new cars versus used cars. Getting the lowest interest rate will depend on well you qualify.
  • One of the best places to shop for auto lenders today is on the internet. You can shop various offers before making a decision. No more high pressure sales.
  • If you have a poor credit, determine if the loan will help improve credit rating. Be aggressive in your search for lenders who specialize in auto loans for those with less than perfect credit. It could save you money in the long run.
  • The convenience of shopping online for auto lenders gives you the advantage of doing research on the lender to determine which are legitimate and which might be scams.

 

Once you have located a lender, make sure you understand the repayment period and other terms of the contract. Online shopping for a vehicle loan could turn up some different lenders as well as different interest rates, so do your homework.

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General Auto Finance Tips

Applying online for an auto loan

Posted on Aug 13, 2012 by Albano Stefani

In the past, one would have to physically visit the bank to get information on loans. Other options that one would use to own a car is to save which could take a long period of time. The good news is that the loan application process has been simplified by use of the internet. The convenience of applying for an auto loan from whichever place as long as one has a computer and internet connection is very convenient.

 

Online loan applications are available for anyone who has a specific interest. There are several websites that offer auto loans to those that meet their requirements. However, since there are both legitimate and illegitimate firms online, it is advisable to carry out adequate research prior to making a loan application.

 

Small businesses have been able to take advantage of the internet and showcase their businesses as being very stable. This makes it imperative to carry out research on the business in order to verify how stable it is. By visiting them at their physical location, one can be able to judge if this is a company worth dealing with.


 
While making online credit applications, one can use the following tips so as to get the best deal possible:
• Start by using the search engine to identify as many organizations as possible that offer car loans.
• Compare the different offers being made by the various auto finance companies.
• Determine the qualification criteria used by the auto finance companies so as to determine if you meet the requirements.
• Perform a background check of the companies that you are interested in.
• Finally, ensure that you read the terms and conditions stipulated in the contract carefully so as to make an informed decision.

 

The beauty about online applications is that one can make an application any time of the day or night. With the internet one is saved a lot of time and effort when making auto loan applications. 

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At the Dealership - Tips and Advice

Getting a bad credit auto loan online

Posted on Jun 13, 2012 by Albano Stefani

When you have bad credit, it can be very difficult to get financing for a new car. You will be offered rates that are higher than you generally want to pay or you may even experience constantly being turned down for financing. It will be necessary to shop around for bad credit auto loans online.

 

In order to get a better rate on your new vehicle, you will need to have your own financing before going to the dealership. There are numerous companies online that will be able to assist you in getting a lower interest rate. The advantage to the customer is that it will be easier to get better terms, and the online lender will not be concerned about the negative history on the credit report.

 

Bad Credit Car loansThe process for bad credit auto loans online is fairly quick; you will just simply fill out the online application and wait for the response. The smart consumer knows that they should never take the first offer for financing. They should shop around and obtain quotes from several lenders to see who is prepared to offer them the better deal.

 

A car shopper can eliminate some of the unnecessary stress that customers have to deal with while at the dealership and be able to focus on getting the vehicle of their choice because they will not have to worry about a car salesman telling them that they do not qualify for a certain vehicle, because once they have entered the car lot, they will know the amount that can be spent, this will also help the consumer to avoid feeling embarrassed by their credit situation.

 

No one should be made to feel as though they are a victim because they have bad credit. Sometimes certain situations cannot be avoided and an individual will not be able to maintain their credit in good standing, when this happens, one should seek bad credit auto loans online.

Dealer auto financing vs outside financing

Posted on Apr 25, 2012 by Albano Stefani

One of the most important decisions that a car buyer can make is whether to go with dealer automobile financing or outside financing for new or used vehicle. There are many things to consider when deciding between the two options of dealer auto financing and outside financing.

 

The first thing to consider is that though outside financing may have a slightly lower interest rate depending on market forces, outside financing will most likely be harder to get than dealer auto financing. Car loans are more easily originated from the places in which the actual product to be financed is located. Outside financiers do not have the proper information to be able to adequately price the product; therefore, they cannot offer you the best deal simply because they do not know what they're doing.

 

However, the advantage of the dealer auto financed deal is that they know the product inside and out. They know very well what their competition is offering and they know that to keep their business they have to be at or below that price. This is why it is so helpful to go into an auto dealership with a clear idea of the car that you want to purchase; if you do this, then you will be much more likely to get a deal from a dealer with the ability to finance your automobile.

 

Aside from knowing which car you want specifically, to get the best deal on a car loan you should definitely do your research online first. Doing your research online first gives you a metric for how the market is at present, and also gives your dealer the indication that you are not a person to be trifled with. They will therefore give you the best deal up front, saving you and them time and money. 

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General Auto Finance Tips

Applying online for an auto loan

Posted on Jan 24, 2012 by Albano Stefani

In the past, one would have to physically visit the bank to get information on loans. Other options that one would use to own a car is to save which could take a long period of time. The good news is that the loan application process has been simplified by use of the internet. The convenience of applying for an auto loan from whichever place as long as one has a computer and internet connection is very convenient.

 

Online loan applications are available for anyone who has a specific interest. There are several websites that offer auto loans to those that meet their requirements. However, since there are both legitimate and illegitimate firms online, it is advisable to carry out adequate research prior to making a loan application.

 

Small businesses have been able to take advantage of the internet and showcase their businesses as being very stable. This makes it imperative to carry out research on the business in order to verify how stable it is. By visiting them at their physical location, one can be able to judge if this is a company worth dealing with.


 
While making online credit applications, one can use the following tips so as to get the best deal possible:
• Start by using the search engine to identify as many organizations as possible that offer car loans.
• Compare the different offers being made by the various auto finance companies.
• Determine the qualification criteria used by the auto finance companies so as to determine if you meet the requirements.
• Perform a background check of the companies that you are interested in.
• Finally, ensure that you read the terms and conditions stipulated in the contract carefully so as to make an informed decision.

 

The beauty about online applications is that one can make an application any time of the day or night. With the internet one is saved a lot of time and effort when making auto loan applications. 

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General Auto Finance Tips

Auto Loans for Poor Credit

Posted on Dec 07, 2011 by Albano Stefani

If you need a car and have poor credit you may be worried about getting a loan. Many people with credit problems find it difficult to get lenders to take their business. Rest assured that you are not alone. Millions of good people suffer from poor credit from time to time. There are many banks that will extend you a poor credit auto loan. Finding the right one requires a little knowledge, but there are companies that will lend to you.


Know Your Score

It's not enough to just know that you have poor credit. Knowing your actual credit scores with the three major credit bureaus is the first step in getting the best rate for your auto loan. Your score may not be as bad as you think, and you may actually qualify for a lower interest rate than you expect. Late payments, reposessions, bankruptcy and foreclosure can all effect your score. However, there are many buyers with these credit problems that get approved for an auto loan. Know your score before you shop and you may be able to negotiate a more favorable rate on your car loan.

 

Newer is Better

Did you know that it can be easier for a person with poor credit to finance a newer car than an older one? When banks consider whether to extend you credit, they also consider your motivation for paying on your loan. If you are purchasing a high-mileage car, chances are that the car will need major repairs within a few years. The banks assume that a person will be more likely to make regular payments on a car that is in good working order than one that is in need of repairs. Therefore it is sometimes easier to get a loan on a car that is newer and has a longer lifespan than one with high mileage.

 

There are many banks available that will extend you a poor credit auto loan. Shop smart and know your credit score and you will be on the road to driving independence in no time.