Auto Loans for Bad Credit
April 8, 2015
Not long ago, if you didn’t have an impressive credit history, you can pretty much forget qualifying for a decent car loan. These days however, there are specialized lenders who put together financing packages for auto loans for anyone with unblemished credit history. What this tends to mean is, that even if you tried your best before to get past their jump through all the hoops and qualify for a loan, you could conceivably try again today and possibly qualify for a loan. Credit unions, the banks and other auto finance firms that deal in prime loan prospects usually stay away from anything risky such as making onto loans for bad credit score holders. To these established players, anything less than stellar credit record makes the deal a little too risky for them. The trouble with this approach is, that relying on a credit score isn’t the best way to tell if a particular pr loan applicant is likely to default. Credit scores can be notoriously unfair. People with a new credit history can have a low score even if they have a great job; people can have mistaken penalties under credit reports; they can even have poor credit score is just because they happened to shop around a lot for a loan.
The smaller nonpublic lenders though try to look past the credit score, into the real meaning of credit report. Still, auto loans for bad credit don’t really make much financial sense. You would probably do yourself a big favor if you could clean up your credit score so that you rate about 680. And of course, you need to be making at least $1500 a month. If you can’t swing any of this, you should probably not apply for an auto loan at all. Auto loans for bad credit holders can be a terrible deal for many reasons. People who have trouble financing a car are usually people who have been repeatedly turned down and have terrible self-esteem walking in to each new dealership or financing office. When the dealer tries all kinds of tricks on you, trying to sell you a VIN etching, an extended warranty, they barely have the nerve to object because use of grateful for the offer the loan in the first place.
One of the biggest scams that applicants for auto loans for bad credit scores deal with is, the “subject to financing” scam. They know that you are so grateful to have a loan that they sell you on a proposition for a low sounding APR and send it home in a new car. Two weeks later, they call and tell you that that particular deal fell through, but that they have a need proposition with an even lower APR. He had better know that that’s not possible. The only thing that makes it possible is that they’ve extended the number of months you’ll be paying your car off. You’ll be upside down on your car very soon. Make sure that you check all the online loan calculators give you a rate on your credit score. Never sign anything until you do so.