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Car Loans, A Car Loan For People With Bad Credit
by Peter Garant
Most banks have strict policies about whom they will lend their money to and for what the money will be used. They will not grant you a car loan for a used car which is older than five years. They charge higher interest rates on loans for used cars than on loans for new cars. And very rarely do they grant loans to people who fall under the “subprime” category.
A person who is considered a subprime borrower is one who has a blemished credit history. He may not be paying his bills on time or he may overextend his credit card. A subprime borrower is usually someone who has a credit score below 620. If your loan application has been rejected on the grounds that you belong to this credit-unworthy group, does this mean that you cannot borrow anymore? You may still get a car loan if you will look for lenders that grant financing to subprime borrowers. Avoid finance companies that advertise “1.9% interest ”. Notice the sign ( )? Below the big ads, written in fine print, the means for prime borrowers only or for people with excellent credit. Clearly you do not belong to this worthy group. People with bad credit will have less privileges when getting a car loan. The interest rates are decidedly high. You may opt to search for online lenders. But there are measures you may take to improve your circumstances.
The first thing to avoid is to rely completely on the car dealer. He will always get a certain percentage out of car loan transactions. In fact, it will be advisable if you are able to secure a car loan before you allow a car dealer to be within a shouting distance from you. When you look for a credit grantor, don’t accept the first one you encounter. Compare interest rates offered by lenders, but don’t accept the average rates they give. A lender may offer a lower interest rate for a person with a credit score of 800 and a higher interest rate for someone with a score of 600. Ask for specific rates. You may also approach credit unions and banks where you have a current account.
You also have a chance to improve your “category” by checking your credit report and reforming your credit score. For example, there might be an error in the information found in your credit report. This error may have been the one responsible for the black mark on your credit history. You must immediately have this error corrected by informing the credit bureau in writing.
Credit scores can change. If you pay your bills on time and if you always stay within your budget, then your credit score will likely improve. Once you have a higher number, you may get a lower-rate refinancing for your car loan.
About The Author: Peter Garant is writing articles about bad credit for his credit repair kits blog http://creditrepairkits.blogspot.com/ and articles about car loans for his family finance site http://www.halds.com/category/car-loans/
These articles on lifestyle and more
Return to the selection of car loans
You may want to try these articles on car loans
Car Loans, Understanding Your Car Insurance Policy by Jason Hulott1 Approximately 569 Words
Car Loans, Saving Money On The Costs Of Running A Car by Harry Griffiths Approximately 511 Words
Car Loans, Low Interest Rate Auto Loans - Advantages Of Applying Online by Carrie Reeder Approximately 369 Words
Car Loans, Online Car Loans by D. David Dugan Approximately 728 Words
Car Loans, Tips On How To Get The Best Car Loan by Gray Rollins Approximately 567 Words
Car Loans, Gap Insurance: A Financial Safety Belt by Peter Garant Approximately 466 Words
Car Loans, The Perils Of Buying And Financing A Used Car by Peter Garant Approximately 516 Words
You may want to try these websites for additional information
http://www.eloan.com/s/show/calculators?linksrccalc
http://www.bankrate.com/brm/rate/auto_home.asp?link5
http://www.carbuyingtips.com/
The information provided in this article is the express opinion of the author. Exchangenet is not responsible for the content!
Most banks have strict policies about whom they will lend their money to and for what the money will be used. They will not grant you a car loan for a used car which is older than five years. They charge higher interest rates on loans for used cars than on loans for new cars. And very rarely do they grant loans to people who fall under the “subprime” category.
A person who is considered a subprime borrower is one who has a blemished credit history. He may not be paying his bills on time or he may overextend his credit card. A subprime borrower is usually someone who has a credit score below 620. If your loan application has been rejected on the grounds that you belong to this credit-unworthy group, does this mean that you cannot borrow anymore? You may still get a car loan if you will look for lenders that grant financing to subprime borrowers. Avoid finance companies that advertise “1.9% interest ”. Notice the sign ( )? Below the big ads, written in fine print, the means for prime borrowers only or for people with excellent credit. Clearly you do not belong to this worthy group. People with bad credit will have less privileges when getting a car loan. The interest rates are decidedly high. You may opt to search for online lenders. But there are measures you may take to improve your circumstances.
The first thing to avoid is to rely completely on the car dealer. He will always get a certain percentage out of car loan transactions. In fact, it will be advisable if you are able to secure a car loan before you allow a car dealer to be within a shouting distance from you. When you look for a credit grantor, don’t accept the first one you encounter. Compare interest rates offered by lenders, but don’t accept the average rates they give. A lender may offer a lower interest rate for a person with a credit score of 800 and a higher interest rate for someone with a score of 600. Ask for specific rates. You may also approach credit unions and banks where you have a current account.
You also have a chance to improve your “category” by checking your credit report and reforming your credit score. For example, there might be an error in the information found in your credit report. This error may have been the one responsible for the black mark on your credit history. You must immediately have this error corrected by informing the credit bureau in writing.
Credit scores can change. If you pay your bills on time and if you always stay within your budget, then your credit score will likely improve. Once you have a higher number, you may get a lower-rate refinancing for your car loan.
About The Author: Peter Garant is writing articles about bad credit for his credit repair kits blog http://creditrepairkits.blogspot.com/ and articles about car loans for his family finance site http://www.halds.com/category/car-loans/
These articles on lifestyle and more
Reprint this article free of charge as long as you keep the author's resource box or bio intact and the links active. A copy of the ezine or URL of the page where the article was reprinted emailed to the author would be very much appreciated. car loans
Return to the selection of car loans
You may want to try these articles on car loans
Car Loans, Understanding Your Car Insurance Policy by Jason Hulott1 Approximately 569 Words
Car Loans, Saving Money On The Costs Of Running A Car by Harry Griffiths Approximately 511 Words
Car Loans, Low Interest Rate Auto Loans - Advantages Of Applying Online by Carrie Reeder Approximately 369 Words
Car Loans, Online Car Loans by D. David Dugan Approximately 728 Words
Car Loans, Tips On How To Get The Best Car Loan by Gray Rollins Approximately 567 Words
Car Loans, Gap Insurance: A Financial Safety Belt by Peter Garant Approximately 466 Words
Car Loans, The Perils Of Buying And Financing A Used Car by Peter Garant Approximately 516 Words
You may want to try these websites for additional information
http://www.eloan.com/s/show/calculators?linksrccalc
http://www.bankrate.com/brm/rate/auto_home.asp?link5
http://www.carbuyingtips.com/
The information provided in this article is the express opinion of the author. Exchangenet is not responsible for the content!
