It may be stretching it a bit to say that this will help all members of the military and their families that have poor credit, since it probably won’t. But the fact is that even if a few of these buyers can take advantage of the expanded program, it represents a step in the right direction.
The latest survey of bank risk managers shows there’s a bit of caution in the car loan sector. To better their chances of an
approval, consumers with past credit issues need to make sure they have a down payment and, if a trade in is involved, any negative equity is offset by cash.
Not all buyers with credit issues will be given the option of financing a new car, but if you are and the approval is through one of the franchises listed above, you probably wouldn’t go wrong choosing any one of these “cool” cars.
The good news for car buyers with bad credit is that subprime lenders are increasing looking at new cars as a finance option. On the other hand, both new and used car interest rates are climbing.
We previously looked at finding a lender as well as the income guidelines the majority of lenders follow, while today we’re going to go over the bane of people applying with no credit history: time in the bureau.
Most problem credit lenders require a down payment of either ten percent or $1,000, whichever is less. Everything else being equal, the higher the down payment amount, the better the chances for a loan approval.
In addition, if a trade-in is involved, the equity in the trade can be used towards a down payment. If there is no equity of if the trade is worth less than its payoff, the entire down payment plus cash that equals the negative equity will be needed in order to meet the requirements of the loan approval.