There are not many people in Arapahoe who do not get excited by the prospect of buying a new car. This excitement can sometimes be deflated by the whole finance thing. If your credit history is not so good, or basically non-existent, then you may need to find a bad credit car loan.
The fact is buying a car for most people is one of the biggest purchases they will ever make. Owning a car is kind of like a right of passage for a lot of people, and definitely a sign of “coming of age” for most teenagers. Let face it, we all need a reliable car to get around, and most of us would rather drive a nice new or late car than an old bomb. But nice new or late model cars are obviously a lot more expensive than old cars, and that means that most of us will require some sort of auto loan. The problem is that if you have a poor credit history, or have not had time to establish a good credit record, then its going to feel like the whole financial system has it in for you. Unfortunately banks and most financial or lending businesses do not look favorably on people with no or bad credit history.
When buying a car, some things to keep in mind may include. If you are planning to buy a used car, get a friendly mechanic to give it a once over. Keep in mind additional costs such as insurance, registration etc. And most importantly, to enjoy the pride and freedom that owning your own car creates.
How Do You Know What Kind of Loan is Right For You in Arapahoe?
If you still owe at least $7,500 on your current car loan, and the car is not older than seven years old, you may qualify for a refinance car loan. What are the reasons you would want to take the time to procure a new loan? If you are experiencing a budget crunch, as many people in this economy are, you could greatly appreciate the financial savings that await you by refinancing your car loan. If you are familiar with mortgage refinancing, picture the same situation but with your car loan rather than your mortgage. There are a couple of situations you may find yourself in where refinancing your auto loan could be a huge benefit to you.
Perhaps your financial situation is not what it was when you took out your original car loan. Making payments then may have been easier than it is now. Perhaps job loss is at play or your hours have been cut back. No matter the reasons, you would more comfortably be able afford your monthly car payments if the interest rate was lower. With a refinance car loan, that is exactly what you can achieve. Your tricky financial situation will be easier to manage if you can keep your car but lower your payments at the same time.
If you are not sure you want to deal with the process of obtaining a refinance loan, even if you qualify, consider your current situation, including the rate you are paying and the standing of your credit. The people that benefit the most from refinancing their loans purchased their car and took out the original loan with bad or at least not ideal credit. If you have been paying your car loan diligently each month, along with other bills you currently have, your credit will surely have improved and you may qualify for a better rate. Why would you choose to not save hundreds, even thousands of dollars over the length of the loan term?
Perhaps you are not necessarily in financial straits, but you know that interest rates are lower now than when you obtained your loan. As long as you fit within the qualifying parameters, which do not include financial instability, you may be able to obtain that lower interest rate you have been coveting of borrowers with newly-acquired loans. If you took out your loan and chose a certain repayment term, you can change your mind when you obtain a refinance car loan. This is one of the larger draws of going through the refinancing process.
Remember that no matter what your current financial situation is, or the reasons behind why you want a refinance loan, your credit score will be a huge contributing factor in the rate you can currently obtain. If your credit is better now than it used to be, you will likely be able to benefit greatly from refinancing options. Even if your interest rate drops by only a one percent, you can save hundreds or more, freeing up your money for the purchase of other things you and your family need.
Refinance Auto Loan With Bad Credit
Facing constant rejection because of your bad credit history? Do you believe that low interest rates are just reserved for people with good credit? Do you think buying a car is just a distant dream for you?
Well, this piece of information can provide you relief and substantially increase your chances of getting an affordable auto loan. Last month Reuters ran published an article titled, "Car lenders ease credit standards and terms to spur loans". It mentions that lenders consider car loans safe in comparison to mortgage and credit card loans. Also, lenders are now offering lenient credit terms due to weak credit demand. One of the credit bureaus, Experian, mentioned that percentage of new car loans offered to sub-prime borrowers increased by 11.4% this quarter compared to last year. This means people with bad credit can even buy a new car without any trouble.
So, getting bad credit car loans has become possible today. There is no better time to buy the car of your choice. But, are you still unsure of getting an affordable car loan? If you are still in doubts, make use of these strategies and not only get instant approval on your bad credit car loan but also avail the lowest possible rates.
Preparation Is the Key
Buying a car is major decision because you spend your life-savings on it. It is a commitment of making regular payments. You just cannot go to a dealer without thorough research. So, before purchasing a car or applying for an auto loan, here are few important things that demand your attention.
Clean-Up Your Finances First
Whenever you want to buy a car, do not just rush into the decision. You must sign the dotted line only after you are sure of what you are getting into. There have been instances where lenders have duped innocuous borrowers on the pretext of bad credit score.
It is always important to study your credit report before visiting the lender's office. You can get a free annual copy of your credit report from annualcreditreport.com. Study all the entries and dispute for any unwarranted transactions and errors. It is a known fact that credit bureaus commit mistakes while calculating your credit scores. You can improve your credit by removing all the errors. Also, start making payments on your debts. Even if you can pay-off a few of your debts, it will have a positive impact on your credit score. Doing all this requires time and that's why you must comprehensively plan your car purchase and avoid a hasty decision.
Down Payment to Down Your Rates
The initial upfront amount that you pay for buying a car can be a useful way of reducing interest rates. Making a substantial down payment of ten to twenty percent can lower your loan amount and thus, the lender's risk. Also, the lender will be assured of your financial stability. This will definitely bring down your car loan cost.
Co-Signer - A Comforting Thought For the Lender
When you have someone to co-sign your car loan contract, the lender is assured of his money. This is so because he can get it from the co-signer if you miss out on payments. Finding a co-signer is a bit tough but if you can manage one, it would work wonders for your car loan.
If you just cannot find a co-signer, you can avail auto loans without co-signer which come with slightly higher interest rates. Nonetheless, it is important that you exhaust all your options before opting for no co-signer car loans.
Online Bad Credit Car Loans - A Better Option
An online bad credit car loan offers you the option of getting an auto loan without leaving the comfort of your house. You can apply by logging in to your computer. Online car financing companies are a perfect choice because banks do not entertain people with poor credit. To avail money from a credit union, you need to be its member. When you apply for a car loan from an online auto financing company, you have the option of comparing several auto loan quotes. This is not possible when you avail dealership financing.
Also, online auto financing companies work with several sub-prime lenders which make it easier for them to process your auto loan application. This drastically improves your chances of getting a low interest bad credit auto loan.
How to Choose Your Bad Credit Car Loans?
Choosing a bad credit car loan is easy if you carefully read the vehicle loan contract. It is essential that you do not just focus on low interest rates, but instead look at the bigger picture. Calculate Annual Percentage Ratio (APR) which will tell you the interest rate for a whole year instead of the usual monthly rate. It also considers fees like loan origination fees and other miscellaneous expenses which will give you a better idea of the cost of car loan.
Check for any pre-payment penalty because it can significantly increase your expenses if you decide to pay-off your loan early. Ensure that the lender is a reputed name in the auto financing industry.
A little bit of caution can take you a long way in securing the best auto loan option. Bad credit is never an issue if you know how to tackle it. These strategies and important cues will help you get easy approval on your car loan application.
Remember bad credit is just your history; it is in your hands to write your future. Go out there and turn your car dream into reality!