The type and condition of vehicle is important while applying for auto loans

The economic downturn has changed the way car loans are given and rules have been made more stringent. Banks have become stricter with their lending as the overall credit situation of people has taken a toss for the worse. Purchasing a new or even an old car has become a big time investment and for those with poor credit history, the financing has become even more difficult. Getting loans has become a Herculean task but there are a few facts to keep in mind when asking for an auto loan with bad credit history.

The type of vehicle which you intend purchasing plays a big role in securing your loan because some vehicles are perceived to carry lower risks than others. A young individual wishing to buy a sports car will be perceived as high risk than someone looking for a minivan for a family. And on top of this if you wish to buy the fast car on bad credit, you are likely to face a lot of hurdles in getting your loan. Banks will be more willing to risk their money on someone with bad credit desiring to buy a practical/family car rather than on someone with poor credit with a penchant for sports cars. Also, newer cars are easier to apply for loans in the case of a no credit car financing rather than older cars which may start showing problems early enough.

Various cars have different values and banks take this into account when considering bad credit for a car loan. The value of the car is one of the determining factors in accepting or rejecting the demand for an auto loan application.Cars with higher values or those whose values are consistent obviously carry more weight with the lender than vehicles with poor values.

If you wish to buy a car on bad credit, the condition of the car is also important. The bank or the lender is the one investing their money in your car and if it is not in a good condition it is highly unlikely that they will be willing to extend that car loan to you. The more miles a car has, the more problems you are going to face in getting your loan. Cars with lower miles are easier to get financed. A bad credit for car loan need not stand in the way for the purchase of a vehicle provided that the car has not done more than 60,000 miles.

You can still buy a car on bad credit but remember that the type and condition of the intended vehicle will hold the keys to your securing that loan.

Payday loans can be your saviour for auto loans

You have no cash and are stuck with bad credit but you need a car pronto. So, what’s the next step and how do you get around this problem? One of the best solutions is to get a payday loan to buy your car.

Payday advance is one of the best ways to get a car loan on bad credit. It means that you are given a loan in advance of your payday and you are expected to repay it when your next payday comes. This can also be done in monthly installments. There are many website services that are ready to arrange for loans for a car with bad credit. You will be required to fill in application forms stating your personal information like phone number, address, the name of your employer, the figure of your monthly take-home earnings etc. You may also have to give your bank information. The service then matches your information to lenders who may be suitable for your case. 

Once a suitable match has been established, the finer details of the lender will be made available to you and you can log onto their website and check their loan details. The amount which you can borrow is most often directly in proportion to your income. Some additional information like bank statements, lease agreements, check stubs may be required to be submitted. Many lenders call up the employers to verify the facts with them. Interest fees are levied even on payday loans for car on bad creditbut they vary from company to company and the amount of loan required.

After the loan has been approved the money gets deposited electronically in your bank account within 24 to 48 hours. Some may even offer to give the loan directly in cash. On your payday, the repayment amount along with interest will automatically get debited from your bank account. If you wish to borrow more auto loans for bad credit, the lender may permit a turnover for you to borrow again.

Car loan on bad credit is not an impossible dream. You can turn it into reality with payday loan which is amongst the best ways to tackle this problem. A poor credit history need not be deterrence in your quest for a car. It is not a slight on your abilities or your character if you have a bad credit rating; many times, things spiral out of our control and even responsible people can find themselves in tight situations financially. So, if your need for a car loan on bad credit is an urgent requirement, then, go ahead with an application for payday loans. It should work out!

Various options to become eligible for an auto loan with a history of bad credit

Bad credit has become something of a norm in today’s world and it happens not only to spendthrifts but also to responsible people. There may be various reasons for having bad credit but it does not mean that you cannot be eligible for any loans, if necessary. Although most banks are guarded about offering loans to people with bad credit, it is still possible to acquire loans to cover car financing or house mortgage or any other emergency. 

If you are in the market to get loans for a car with bad credit, it may be tough initially. You will have to research auto agents as to your options for getting car loans on bad credit. You will have to show all the requisite documents pertaining to your finances which will include your pay stubs, bank documents etc. so that the dealer will get a better idea about your financial situation. The auto dealer will then take a call as to how much you are capable of paying every month. If you wish to buy a car with bad credit you must be prepared to pay a high down payment; this is so that dealer can cover his losses in case of payment default on your side. But, this also means that you have to pay a smaller amount each month. A person with a good credit standing normally has a 60 months term but for those with bad credit rating, the time period is much shorter; about 24 to 48 months and the interest rate is also high. But, with regular payments, you may be able to opt for refinancing at a lesser rate of interest. 

If you wish to get loans for a car with bad credit at a longer duration of payment and with lower interest, then you will require a co-signer. Any person like your family or friend with a good credit rating can become your co-signer. This ensures the bank that the loan given to you will not be defaulted while simultaneously giving you a chance for improving your own credit rating. Students can enlist the help of their parents as this will help them build up a good credit rating by being able to make regular payments. Loans for a car can also be got through secured loans. In this case, collateral has to be provided as security and which can be repossessed if there is default of payment. 

There are many options if you wish to take loans for a car with bad credit, but, making regular payments is necessary to avail of the benefits later on.

Crucial factors influencing approval of car loans for consumers with bad credit

Although car loans with poor credit is not easy, it is still possible to attain provided you know why and how the lender will agree to it. Some crucial aspects while looking for auto loans with poor credit are as follows:

-           your credit history will obviously be the focus of attention for any lender. People with a record of good credit unsurprisingly find it easier to acquire auto loans than those with bad credit. The interest rate on bad credit loans for car also is higher than the going interest rate. If your credit rating is below par, you should expect to pay higher interest. Secondly, your job history also comes under strict scrutiny. A steady record of employment inspires confidence in the lender and opens up the doors for loans on a car much faster.

 -          As far as bad credit loans for car, it helps if your monthly earnings are a fairly good amount, somewhere in the vicinity of $1500 or more. Anything less and loans for a car with bad credit, although not entirely impossible can certainly get challenging.

-          Lenders take into consideration the ratio of your debt and income. This means how much debt you have incurred in proportion to your take-home earnings. If your debt-to- income ratio is sound, you will have no trouble in securing a loan despite bad credit but if it is the opposite, you have to work hard to reverse the situation. Only then do you stand a chance for a car credit with bad credit.

-          You will be required to pay a higher down payment than normally required because of your bad credit history. It makes sense to somehow gather enough down payments even if it is high because it will benefit you in two ways despite the initial struggle. You will be more easily assured of getting an auto loan and you will end up paying lower monthly instalments which will certainly be easier on your pocket in the long run. Your interest rate will also go down. 

-          Also, it pays to know people! If you can come up with a fair number of personal as well as business references, your case for auto loans will become stronger. Lenders will be more willing to give you loans when they see that there are people to vouch for you. This is called ‘third-party’ references and goes to establish your credibility a long way.

Today, millions of responsible individuals have an imperfect credit history, so, there is no reason why you cannot get an auto loan for a car, if you follow the above guidelines.

Some facts about attaining car loans despite bad credit

For anyone seeking a loan, a good credit standing is indispensable. The reason is very simple; lenders are wary of loaning money to individuals who may not be able to keep their financial commitments due to their poor credit and then the lender will have to take the hit financially. But, there are ways and means of getting loans despite bad credit and if you are one of those consumers wishing to get an auto loan with bad credit, you must be prepared for the following:

Individuals with less than desirable credit scores are forced to seek auto loans for bad credit and have to be ready to pay higher interest rates than the going rate. The rate of interest offered to borrowers with good credit standing differs substantially from those offered to people taking loans on a car on bad credit. It helps to shop around and see whether a better deal can be found as sometimes it is possible to get a good interest rate despite of poor credit.

Auto loans for bad credit do not come cheap. This is factual which must be accepted and poor credit holders must be ready to pay a big down payment to the lender. People with good credit scores inspire confidence in the lender as to their ability to pay back the loans. But, people with bad credit have to make a bigger down payment against those with better credit. This is simply to protect the interest of the lender in case the borrower defaults on the payment and thus minimize the risks taken by the lender. Some schemes are available where borrowers with poor credit do not have to make down payments but these also come with strings attached and it is better to understand the deal before making any commitments.

Bad credit for a car loan also implies that such individuals will be required to agree to a shorter time period of loan repayment as compared to those with good credit scores. People with bad credit are expected to make the payments in 24 to 48 monthly installments as compared to the 60 months time period granted to good credit score holders. This is because the lender is wary of giving loans for a longer period of time for fear of default payments by the borrower. The amortization schedule of loans for a car for bad credit is generally unfavorable to the borrower as lenders do not want to take any risk with their money.

It is evident that auto loans for bad credit are not easy to get but it is also not an impossible task. For a fast and easy auto loan quote click here.