Subprime Auto Lenders FAQ. Bad Credit Car Loan Approvals in MA

Subprime Auto Lenders FAQ. Bad Credit Car Loan Approvals in MA

Eric from Ludlow writes:
"I just filled out an application for a pre-approval auto loan. I already had a dealership in mind that is part of your network. If I am approved, can I choose any dealership you are associated with?"

Well Eric, Auto Credit Express is not a direct lender. We're a loan matching service. Once you apply, we match you with a dealership that has a lending program and inventory to fit your specific credit situation. Just because in your area we have several dealerships that are part of our network does not mean that each has the lending resources and inventory for your specific credit situation.

Christine from Gardner writes:
"My husband has the most income. My income is only $1,000 monthly, and his is $3,000 monthly. How do I fill out a joint credit application?"

Since your spouse makes the majority of the income, he should be first on the application. You will notice on the bottom of the application page located at AutoCreditExpress.com, there is a checkbox to add a co-buyer. Simply click that box and proceed to enter your information.

Jackie from North Grafton writes:
"Bankruptcy forced me to get a car loan at 24.49% for 60 months. I have paid 10 months good, and would love to lower the interest rate and payment. What are the chances?"

Generally speaking, you would compare the wholesale, or trade, value of the vehicle to the loan payoff. You can find this value at NadaGuides.com. Next I would calculate the loan-to-value amount. That is, the amount that you owe divided by the wholesale value. The closer this number is to 1, or below 1, the better your chances are. From my experience, it is best to wait until you've been making payments for at least 12 months before considering refinancing. Often you will have to wait until near halfway through the loan before the loan value is attractive to a new lender.

Laurie from Worcester writes:
"I am interested in a bad credit auto loan. I still owe $6,948 on my car. I would like to roll my existing loan into a new loan so I can buy a used car and trade in my existing car. Is that possible with your company?"

It is possible. Typically, if you roll an amount on the new loan, that means your trade has a value that is less than the payoff, or negative equity. A general rule of thumb is that for each $1,000 of negative equity, your payment on the new vehicle will increase by $20 or $30. Also, it's much easier to roll negative equity on a larger loan amount than it is a smaller one. For example, if you had $2,000 in negative equity and tried to buy a car that was $4,000 it probably would not work. On the other hand, if you bought a $20,000 car, the $2,000 would represent only 10% of the loan value, and would be much more possible. Finally, you should consider an inexpensive new car with a cash rebate. The rebate money will help reduce the amount of negative equity.

Crystal from Lynn writes:
"I'm just wondering if your banks works with people who have bad credit. I have a charge-off on my credit report. Although I don't look too great on paper, I have a stable job and good monthly income. I've run into the issue where I've been led to believe 'Oh yes, we can deal with all credit types.' And hen they run my credit report and say 'Sorry, we can't help you.' I just wanted to get a proper answer before I have anyone else run my credit report. I cannot get a co-signer."

There are many dealerships that claim they can help people with bad credit, but the fact is that only a few have the lending resources and vehicles to cater to consumers with bad credit. Assuming you don't have much monthly debt, if you have a steady job and income, you would be approved for a monthly payment up to 15% of your monthly income. Depending on how bad your credit is, most lenders would require a cash down payment to cover the sales tax and state fees. As a general rule of thumb, I would recommend $1,000 to $2,000 as a cash down payment.