If you have ever owned a car and been in a position where you still owe more on the loan than the vehicle’s actual cash value, this is called being underwater on a car loan. And, when purchasing a vehicle, there are ways to steer clear of an underwater situation.
When you assume an auto loan, you take over the car payments of the original buyer and gain ownership of the vehicle. However, not every lender will allow auto loan assumption, and not every buyer will be approved to enter into an existing contract.
Obtaining financing for a big purchase like a vehicle can be difficult if you have damaged credit, but it’s not impossible. Here are the four main steps to getting a bad credit auto loan.
When buying a car, a big concern is how much the interest rate on their loan will be. And you typically don’t find this out until you get the loan approved.
You can gain a lot by having someone cosign on your loan, like being able to get approved for the car that will get you where you need to go. But, being a cosigner requires a sizable commitment.
It used to be impossible for lenders to predict the repayment behavior for consumers with thin to non-existent credit. Then alternative data came along.
You realize that you need to purchase a vehicle, only to discover that you have little to no credit history. While it’s great that you don’t have damaged credit, you may have just as much trouble obtaining financing as someone who does. This is because lenders have no way of knowing whether or not you are a loan risk.