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% to 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. Read the full story

Credit unions are more than just a place to do business. They are is a cooperative where loans and financial services are provided to people through a membership. Because there are over 90 million credit union members in the country a CU can save you money. It is estimated that they save their members an average of $8 billion a year.

CU auto loans may be easier to get because they cater more to their members than some banks do.

Another benefit they may offer is a bad credit auto loan.

Now day’s credit union auto loans are becoming more readily available to those that have bad or poor credit. And more importantly they often offer lower interest rates. Lower interest rates also mean lower car payments for you and you can save some serious money.

Depending how bad your credit is… you may need to take on a co-signer to get started with a membership.
So, here is how it works to join…

First, you must be a member. This requires opening an account with them. Most times membership comes with particular companies who offer their employees this benefit.

You may be granted eligibility if you have served in one of the nations armed services also. Read the full story