Used cars are not as easy to finance as new cars. Lenders are more hesitant of financing vehicles with unknown pasts. However, you can find reasonable rates on auto loans by lining up your financing before you go car shopping. A down payment of 10% or more, plus shopping with a car dealer can also improve your rates.

Ascertain your affordability. You must understand that when you set out to make a major financial decision, you must be ready with everything. Prepare your budget. Deduct all your expenses and current loan payments from your gross monthly income. You must consider all the major future expenses like college fees, marriage, holiday trips, etc. If you have a balance enough to make easy car loan payment, only then think of buying a car.

It is essential that you understand your situation before taking any decision. Do you really have bad credit history? Know the reason behind it. Is it a past bankruptcy or a repossession that has made your credit score terrible? Get your free credit report from Annual Credit Report and comprehend it. If you find any unwarranted transaction, ask the credit bureau to remove it.

What happens when you go to your average lending institution? You wait to see a loan officer. You gather together all the paperwork they require – a stack of paper to prove who you are and why you need the money. Of course you don’t want to need it too much. Banks don’t like lending money to people who need it too badly. After your paperwork is all in, you wait for the verdict, which can take quite awhile. By the time you get the loan approval, if you get the loan approval, the emergency you needed the cash for has blossomed into a full-fledged crisis.

The first type of loan is for a car. Although you may need this loan quickly to seal the deal, in reality, this doesn’t fall under the category of fast personal loans. Most are from three to six years in duration, and you will want the lowest rate possible since you will be paying it back over such a long time.

Finally, keep a clean credit history. Once you have secured bad credit auto financing, make sure that you pay your loan on time every month. This will help you get loans in the future.

The interest rates of your existing loans will suddenly rise if your scores fall drastically. So, maintaining good score can always save you from such floating interest rates and paying extra.

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