Archive for November, 2009
Look Online for Bad Credit Car Financing
Posted by Owen in Bad Credit Auto Loans on November 3, 2009
Sometimes it’s hard to keep in a positive frame of mind when your credit score is in the gutter. Nonetheless, you needn’t feel that way forever. If you’re in the market for a new car because your old car is ready for the scrap heap, you needn’t scrap your dreams as well with regards to a new car purchase. Even if you have poor credit you can still qualify for a loan through any of the bad credit car financing programs available on the Internet.
The Bad Credit Blues
Forget that you have a credit score that you wish you could junk with your old vehicle. You can get back behind the wheel of a new model car by applying for a bad credit car finance loan. So, what do you need to do in order for this to take place? Well, besides selecting a car to buy, you’ll need to make sure you can meet the criteria that most lenders who provide car financing for bad credit are looking for in the way of eligibility.
Eligibility Requirements
If you have no credit history, you should be on your job a year before applying for a loan. With a credit history, you’ll need to show proof that you’ve been on the job two years before trying to secure any car financing for bad credit loan. Typically the minimum monthly income requirement is $1500 for most bad credit car loan financing programs. In addition, you can’t have a repossession within the last year unless it’s part of a bankruptcy. Oh! And one more thing, it’s a requisite that you be at least 18 years old.
The Payment Structure
Your monthly payments for your car financing with bad credit loan will be based on the sales price of the vehicle you’re purchasing and your credit report. If you choose to buy a newer model automobile with lower miles, many times lenders can extend the terms of the loan making the payments lower. This is especially helpful if you have to finance your vehicle for a higher APR. If you’re so fortunate, you can secure a great deal on most vehicles that are lower priced with an odometer reading of less than 5000 miles.
The Benefits of Finding a Lender Online
Rather than secure your loan from a “buy here, pay here” dealer, using the Internet to find a lender who specializes in financing a car with bad credit is the better choice for most sub-prime borrowers. With a “buy here, pay here” dealer, you don’t need to reveal your credit history which many sub-prime borrowers like. However, once you purchase the vehicle, none of your payment transactions are recorded on your credit history. Therefore, you don’t have the chance to climb out and away from your poor credit standing. With bad credit car financing, by making your monthly payments, you’ll have the chance to qualify for a lower interest loan in the future.
Look online today if you’re in the market for a new car. There’s a lender out there who will help you with your bad credit car finance loan.
photo credit: Rachel Strohm
The Auto Bad Credit Loan: Test your Knowledge
Posted by Owen in Bad Credit Auto Loans on November 2, 2009
If you wish to purchase a car, you may feel a little trepidation if you have a bad credit score. Nonetheless, it can be achieved through securing bad credit auto loan financing. Take the following “True or False” quiz and see what you know about this subject. You at least have a 50-50 chance in answering each question correctly.
(1) When applying for auto bad credit loan, if you need to remove disputed items on your credit report, you might have to wait at least 6 weeks before you can apply for an auto loan for bad credit.
Answer: False. Normally, it takes about 60 days to remove disputed items on your credit report.
(2) If you’ve just moved, a lender will still look favorably on your application for an auto loan for people with bad credit.
Answer: False. If you’ve moved in the last six months, lenders will not consider this to be a favorable item in considering you for an auto loan with bad credit. Lenders do not like people who move around. They like people who are stable and continue to prevail in their circumstances.
(3) You’re usually considered a sub-prime borrower at any credit score below 500.
False. Generally, if you’re score falls below 500, you’re not considered any type of borrower even for a bad credit auto loan refinance. Sub-prime borrowers have credit scores that range from 550 to 680.
(4) If you want to be considered for a bad credit auto refinancing loan you should make sure you’re not trading a car you still owe money on, that disputed items are removed from your credit report and that your debt to income ratio and credit balances are low.
Answer: True. Lenders like to see this kind of stuff.
(5) If you’re a recent college graduate and have yet to obtain a job, you can still qualify for an auto bad credit loan.
Answer: False. If you’ve just graduated from college, you shouldn’t consider applying for an auto loan for bad credit until you’ve been on the job for at least six months.
(6) It usually helps to show that you’re paying on a mortgage or that you’ve had a past refinance when applying for bad credit auto loan financing.
Answer: True. Mortgage loans and refinances show a degree of stability and that the consumer has been and is making regular payments to pay off a debt.
(7) With regards to obtaining an auto loan for peole with bad credit, if you do not have a credit history, you should be on the job at least one year with the same employer.
Answer: True. This is the minimum requirement.
(8) If you have a credit history, you should be on the job at least 6 months with the same employer to qualify for an auto loan with bad credit.
Answer: False. You should be permanently employed for at least two years to be considered for a bad credit auto loan refinance.
(9) When being considered for bad credit auto refinancing loan, you should not have had a repossession in the last 2 years unless it was included in a bankruptcy.
Answer: False. Normally you’ll be considered for a bad credit auto loan if the repossession occurred within the last year outside a bankruptcy.
(10) If you’re a sub-prime borrower and you have a co-signer, the lender can use the co-signer’s income in order to approve a bad credit auto loan.
Answer: False. Your loan will still be based on your income even if you have retained a co-signer to pledge to pay the loan amount.
How did you do? You can still obtain an auto loan with bad credit. It just takes knowing what steps to take and you’ll be in a new car in a small amount of time.
Applying for an Auto Bad Credit Loan: FAQs
Posted by Owen in Bad Credit Auto Loans, Bad Credit FAQ's on November 1, 2009
If you want to secure funding for an automobile but feel you may be denied in this regard, don’t necessarily give up hope. You can still obtain the cash you need to purchase a vehicle, even with bad credit, by applying for a bad credit auto loan. The following frequently asked questions (FAQs) can further answer your questions in this regard.
(1) What is an auto bad credit loan?
An auto bad credit loan is designed for people with bad credit, typically those individuals who have a credit score below 680 so they can obtain reliable transportation.
(2) Can you still qualify for an auto loan for bad credit if you’re self-employed?
Yes. You can still qualify for bad credit auto loan financing if you’re self-employed although your income is harder to prove. Therefore, when being considered for this type of loan, make sure you provide tax returns for the past two years that have been completed by a tax professional.
(3) What documentation do you need when you apply for an auto loan for people with bad credit?
For income verification, you will need a pay stub from your employer. Other documentation includes a telephone or utility bill to verify your address and phone number and your most recent bank and credit card statements from the last 30 days. In addition, about four references are required and, if you don’t own a home, a phone number for your landlord to verify that you’re up-to-date on your rent.
(4) I’ve heard that obtaining a loan through a “buy here, pay here” dealer is an option for people with bad credit. Is this a good way to secure an auto loan with bad credit?
A “buy here, pay here” dealer type of loan is where the sub-prime borrower obtains his loan through the same dealership he purchases his car. No credit history is required which may lead you to believe this is a good loan to obtain if you have a damaged credit score. However, attaining a bad credit auto loan refinance over the Internet is, in most instances, a better choice . Your payments for a dealer financed loan are not recorded on your credit report where payments are documented if you don’t obtain dealer financing. Therefore, a bad credit auto refinancing loan not obtained through a dealer gives you the opportunity to prove, by making your monthly payments, that you can qualify for a lower-interest loan at a later date.
(5) How are my monthly payments determined for an auto loan for bad credit?
Your monthly payments are based on your credit profile and the sales amount of the automobile you choose to purchase.
(6) How can I qualify for extended terms if I want to lower the amount I spend each month even more?
Usually, if you purchase a newer, lower-mileage vehicle, you’ll be able to qualify for an extended term on your bad credit auto loan financing amount.
(7) If a down payment is required, how much should you put down in order to assure you’ll be approved for an auto loan for people with bad credit?
If you can put down 20% of the sales price, you’re pretty much guaranteed that you’ll secure an auto loan with bad credit.
(8) What are some steps you can take in order to get a better APR on a bad credit auto loan refinance?
If you can repair your credit before applying for the loan, this can be most helpful. Paying off some large debt credit cards can raise your credit score by as much as 200 points. Therefore, lowering your debt and making timely payments six months before applying to obtain a car loan can assist you in getting a better deal. Also, know your credit score before making application. Be well-prepared to handle any questions a lender may have about the negative items on your report. If you can lower your score, maintain a habit of paying on time and reduce some of your debt load, you’ll have the leverage to succeed in obtaining a bad credit auto refinancing loan.
(9) What type of auto is the preferred type of vehicle to finance when it comes to a bad credit auto loan?
Typically, if you select a newer model car (1 or 2 years old) with less than 50,000 miles, you will have a vehilce that most bad credit auto lenders prefer to finance.
There’s a lot of opportunity on the Internet to finance your vehicle even if you now suffer from a low credit score. Check out your options. There’s a lender out there who is willing to work with you.
photo credit: dno1967