The latest forecast from TransUnion predicts more growth in the subprime car loan sector – good news for credit-challenged car buyers. At the same time, these borrowers need to be aware their credit situation, have a down payment, pick an affordable vehicle and choose the shortest loan term possible in order to give themselves the best chance of success.
December is typically a good time to buy a new car since manufacturers are set on attaining their year-end sales goals. Buyers with a trade-in could also benefit from higher than normal used car values, so it looks like this month might be a good time to trade in that old ride on a new one.
By following these tips from H.E.A.T., car owners should have a much better chance of keeping the holidays bright.
Be especially careful when filling out a credit application, making sure all the information entered – especially income – is accurate. If a dealer advises overstating income, the best thing to do is to walk away from the deal and the dealer.
Before choosing a small car, credit-challenged borrowers might want to check out the latest “best and worst” list from Consumer Reports.
There are a number of advantages to simple interest loans, not the least of which is the ability to pay one off sooner and reduce the interest charges without any penalty. The downside, however, is that additional interest charges and penalties can add up quickly if payments aren’t made on time – especially during the first half of the loan.
The question “How much will I get approved for?”, especially for credit-challenged car buyers, can only be answered after a lender has taken a close look at their income, debts, credit score and other aspects of their credit profile.