Consumer Car Buying Advice Blog

There is a way to get your best deal on just about any bad credit car loan

First get approved

If you have bad credit and you’re thinking of applying for car loans with bad credit, you’re probably looking for a way to get your best deal on bad auto credit loans. We know because at Auto Credit Express because we’ve been working with car buyers with poor credit for over two decades. In fact, after seeing the embarrassment and hassles that customers with bad credit often face, we even developed a web site that features a bad credit auto loan application. We then match up these customers with local dealers that specialize in customer credit issues. This way, they will have their best chance at getting approved for a car loan, even if that means bad auto credit loans.

The alternative – buying a vehicle from a tote the note, we finance anyone car dealer – can be a problem because normally these dealers don’t report car payments to the credit bureaus. At the same time, taking out a loan through a dealer with a bad credit lender and choosing the wrong kind of vehicle can also create problems and might even result in repossession.

While it’s difficult to shop interest rates on bad auto credit loans, since they are based on more than just credit scores, there is, however, a method you can use to reduce the amount of money you pay in interest charges.

Reduce your bad auto credit loans interest

One of the easiest ways to reduce interest charges on a bad credit car loan, or any loan, for that matter is to shorten the length of the loan. While a shorter loan term will increase the amount of your monthly payment, it will also lower the amount of interest that you pay on the loan.

For example, if you finance a car with a selling price of $15,000 plus tax (7%), fees of $120 (non taxable), and a down payment of $2,000, the total amount to finance works out to $14,170 (you can duplicate this process by going to our loan calculator).

If you finance this amount for 60 months, an interest rate of 15% (typical for bad auto credit loans) will put the monthly payment at $337 per month. The amount of interest on this loan works out to be $6056.

If you change the loan period to 48 months, the monthly payment increases to $394 (an additional $2 a day), but the amount of interest you’ll pay over the life of the loan would drop to $4760 – a decrease of almost $1300 ($27 per month, on average) when compared to the five year loan (you can also verify this with our loan calculator).

Less negative equity time

In addition to reducing interest expenses, there is another big benefit to shortening the loan term.

By shortening the loan term, you will substantially reduce the time in which your car is worth less than the loan payoff amount. This means that when you are ready to trade in you car in a year or two for a different vehicle and at a lower interest rate (which you should qualify for if you’ve made your payments on time), you will either have less negative equity or, possibly, even real equity in your trade-in.

The Bottom Line

If you need to get a car with a bad credit car loan, you should be looking at the process as a step to better credit. Finance the car for the shortest loan period that you can afford. Make your payments on time and use this as a means to reestablish your car credit.

Auto Credit Express has helped thousands of people with bad credit buy cars and reestablish their car credit at the same time. Our nationwide network of affiliate dealers specializes in bad auto credit.

So if you are serious about getting your credit back on track, you can begin the process right now by filling out our secure online bad credit car loan application.

Tags: auto credit loans, Auto Loans, bad auto credit loans, Bad Credit, car loans

This entry was posted and is filed under Auto Loans, Bad Credit. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.