Auto Loans

Bad Credit Does Not Mean No Loan

Bad credit should not call a screeching halt to getting a car loan. Lending enterprises are out there that will approve a car loan even for those with no credit, poor credit, or even bankruptcies. Some car ads you see for auto loans for those with bad credit seem to promise a car no matter what the state of your credit reports. Believe it or not, many of those are grounded in the truth, but you need a guide to understanding your options and how these loans are engineered.

Process Is About the Same

You can get a car loan through direct financing and the process is much the same as for auto loans made to those with good credit. Of course, borrowers with bad credit may be asked to come up with a larger down payment and endure interest rates that are somewhat higher. Down payments can range form 20% to 50% and interest rates can range from 5% to 26%. Generally, auto loans for those with bad credit can have rates ranging between 7% between 18%. Two to four years is usually the range for amortization for auto loans for those with bad credit as opposed to 5-7 years for those with excellent credit. At least taking on such a loan does provide the opportunity for you to improve your credit standing.

Poor Players

Plenty of abuse occurs in the market for auto loans for those with poor credit. Dealers will inflate car prices or pump up interest rates. If a dishonest dealer sells a car for $5,000 that usually goes for $2,500, then takes a down payment and plugs in an interest rate of 24-26%, the buyer then has an overpriced car and a loan that is unreasonably high. Often the buyer defaults, further ruining his or her credit. Or just as bad, ends up paying two or three times the worth of the automobile. Do diligent research before buying any car so you will not pay more than the market demands.

Good Players

Sometimes buyers can find dealers who are anxious to get certain cars off of their lots and can make a good deal. Concessions for lower down payments or interest rates can be made for those who want auto financing for those with poor credit. You may find this particularly true for new vehicles financed by a financing arm of certain manufacturers. The amortization process for newer cars can be longer as well.

Shopping Online for the Best Rates and Terms

Shopping is online makes finding auto loans for those with bad credit so much easier. The internet even has a dealer networking system engineered to make shopping a breeze. Simply click on one of the many sites advertising car financing. You will be required to divulge certain information. These facts will be passed on to dealers willing to deal with those who have poor credit. You can work with these dealers to get decent financing even with bad credit. Read the full story

Unfortunately, most communities in the nation require a car for everything from getting to work to picking up the kids and on to shopping at the commissary. A car is necessary to a most households and military service members and their families are no different. By taking a military auto loan, you may be heading off high interest rates in exchange for quick processing and approval times and straight-forward and uncomplicated contracts.

Looking at Interest Rates and Other Benefits

Military auto loans are usually available at lower interest rates, due mainly to your job and income stability. A lender is pretty much assured of regular payments and can offer you more benefits. Among them are:

- Longer time to pay off the loan. – 100% car financing, no down payment. – Lower charges for taxes, licensing, origination and activation fees. – No collateral as the car itself becomes the security. – No prepayment penalty. – No U.S. domicile requirement, very handy if you are deployed overseas.

Flexibility on Credit Scores

Military auto loans usually have a lower credit rating benchmark than civilian loans. Most military auto lenders understand the precarious position of armed services members and understand that a military lifestyle makes some untoward demands that can result in lower than usual credit scores. Your credit scores will not be as important as the salary you make compared with your debt load. This debt-to-income ratio will be the final arbiter of how much you can borrow. Some lenders offer no credit check, military auto loans if you have particularly poor scores.

Flexible Repayment Terms

First of all, military or civilian, missing a payment is a high crime against yourself and your lender. But, you are in the military and sometimes because of deployments and relocation it can be difficult. Often lenders will allow postponement of payment or delay of payment due to financial difficulties. You will not find that with civilian loans. You can also consider giving Power of Attorney to your spouse or another trusted individual so they can make decisions and payments on your behalf. You can have the paymaster allot payments from your paycheck directly to the lender. Or you can have the payment automatically taken from your banking account. Of course, debit and credit cards, checks and cash are always acceptable. Read the full story