Car Tuning,Car Finance,Auto Loans

Archive for January, 2009

If you have a low FICO score, you may find that it is a challenge to obtain good auto financing. Bad credit can affect your ability to obtain good interest rates, APR’s and in many cases, getting a general overall credit approval.

Fortunately, there are lending services that specialize in helping people in your situation.

For companies that specialize in this type of car financing, bad credit isn’t as difficult to overcome. Finding a good lending source that can help you to overcome your past credit problems and rebuild your credit bureau score without having to have a big down payment, can be a big help. Without using a service of this type, you may find that getting approved for auto financing with bad credit is very difficult.

Even if you’ve been refused or turned down at a local dealership for auto financing, bad credit car loan companies that specialize in assisting people with rebuilding their credit can help. Some companies understand that when you’ve gotten into a situation of having perpetual late payments and financial problems, that it only makes things worse when you can’t get a car loan. These types of companies will work to help you and get you behind the wheel with a good auto loan with reasonable payment terms.

One great aspect about prearranging your auto financing is that you can shop for a car with confidence knowing what you can qualify for before you decide on a vehicle. Too many times, people decide on a vehicle before they know where they will obtain the funds. Cash isn’t floating around like it used to be for down payments, so you should really look into getting preapproved auto financing. Bad credit doesn’t have to hold you back if you just use the right kinds of lending services. There are a few legitimate sources online that can help you and work with you, rather than working against you.

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Auto loans for bad credit are offered to people who have acquired bad credit by late and/or missed payments. A bad credit auto loan helps to re-establish the credit history of borrowers. Bad credit auto loans can be used to buy a used vehicle. Sometimes, these loans can be used to finance a new car. Bad credit auto loans are short-term loans, and their repayment period extends from 48 to 60 months.

The first step in the process of applying for a bad credit auto loan is to determine your FICO score, also known as credit score. Credit bureaus such as Equifax, Trans Union, and Bradstreet can determine your credit score. A credit score of 650 and below is regarded as bad credit. Borrowers with poor credit are usually offered high interest rate auto loans. The next step is to search for a trustworthy lender. The Internet is a good source to locate lenders dealing in bad credit auto loans.

Financial institutions, banks, credit unions, dealers and brokers extend bad credit auto loans. All of them employ a kind of risk based valuing approach in offering bad credit auto loans. A co-signed loan is one of the best options for a bad credit auto loan. If borrowers fail to repay the loan, the co-signer undertakes the responsibility to pay back the loan. In order to secure bad credit loans through dealership, borrowers have to pay premium prices.

The last step is the comparison and evaluation of interest rates and fees charged by various lenders. Auto loan quotes from multiple lenders can be used to select the most competitive interest rates.

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If you have recently filed bankruptcy, you may wonder if its possible to get auto financing again. There are more and more loan companies all the time that have new programs to help finance people with bad credit. An auto loan is easier to get financing for than a personal loan or an unsecured loan because the lender can use the car as collateral against the loan, in case the borrower ever defaults or doesn’t make the loan payments.

Here are some tips to help you when getting financing to purchase or refinance a vehicle after a recent bankruptcy.

1. Get Financed To Re-establish Your Credit – Getting a new car loan can help you re-establish your credit when you make your payments on time. Once you have made payments on time for about 6 months or longer, you should be able to refinance your car at a much lower rate. As you make your payments on time, your credit score will increase.

2. Buy The Lowest Priced Car You Can – When financing a car after a recent bankruptcy, you can expect to see interest rates as high as 14-19% or more. It is not wise to buy a car that is more expensive than you need because, initially, you will be paying such a high interest rate on the amount you are borrowing on. If you do want a more expensive car, wait until you have made payments on time for a year or two, after your credit rating has increased. Then, you should be able to get an interest rate of around 9-10% or less.

3. Get Multiple Offers – There are many lenders online that will offer you up to 4 offers from one application. Most of these loan companies will not even pull your credit with the initial application, they will just ask you to describe your credit. This way, your credit score will not drop from being pulled too often.

To view our list of recommended auto financing companies online, visit this
page: Recommended Car Loan
Companies Online For People With Bad Credit.

5 Steps for Getting Car Finance

Getting approved for finance can be an easy process made harder by being under prepared. Many people will end up disappointed – missing out on the car they wanted because another buyer got the money quickly.

Here are 5 steps that will make the process run smoothly and get you to settlement quicker.

Step 1) Find a Car: If you have found the car of your dreams that’s great, if you haven’t don’t stress but at least have an idea, finance company final approvals are based on the vehicle you buy so if you find a similar model for your first approval it won’t pose a problem if you end up getting a slightly different car.

Step 2) Be Prepared: It doesn’t matter which lender you use they are all going to want to know allot about you before they hand over their cash. So make sure you have all your information on hand, this often includes drivers license numbers, details about your address (and possibly previous residences), your employers details and also any information about previous borrowing, if you have a partner on the loan you will need to have their information and they will need to be prepared to answer questions as well.

Step 3) Be Available: The lender may require you to send in some documentation, the only hold up at this stage is YOU. Make sure that you have access to a fax or scanner to get this to the lender and that if you are needed to sign the documents that you are available.

Step 4) Read Carefully: Make sure you read the documents carefully and I don’t just mean the small print, the documents are a legal document and you need to sign and date in the correct places or new documentation may need to be drawn up.

Step 5) You’re Approved: You’ve got the finance approval you know how much you can borrow, now you need to ACT NOW, find the exact car you want (if you hadn’t already) use the approval to bargain with the seller, they will have to provide the finance company with certain documents, collect these, get them to the lender and the next step is settlement.

It can be an easy or hard process depending on how you react to the requirements of the lender, ignore these steps and it could more than a week or you can follow these steps and you will be amazed how quick it can be.

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