If you are dealing with bad credit, you are probably seeking out an auto loan that is affordable. Having limited finances and reduced lending options tend to make this difficult to find. Up until a few years ago, the longest recommended loan term you could get with an auto loan was 60 months, or 5 years. In recent years though, the length of car loan contracts have extended all the way to 96 month loans, or 8 years. The reason this has become so much more common is because it is a way to reduce the immediate monthly expense of a car payment.
Want to get good interest rates and deals on an auto loan? It all comes down to one thing: your credit rating. When you have great credit, the sky is the limit. You can qualify for great offers like 0% financing, no money down offers, and low cost leases. But when you have damaged credit, your options may be initially limited, but as long as you take steps towards rebuilding your credit, you can improve your chances for those great offers in the future.
When you purchase a new or used car from a dealer, your auto loan will include a variety of fees that you will be expected to pay. And for a lot of buyers who only focus on the monthly payment, as opposed to looking at the total vehicle cost, these fees will seem like they are “hidden.” While many of the fees are non-negotiable, some of them are avoidable, so it pays to know what to look for when you’re going over your sales contract.
If you have been approved for a loan, the time has come to select the vehicle you want to purchase. So what are your options? Can you really get any car you want? Your biggest limitation is your price range. How much can you afford? Keep in mind that when you have bad credit, you will need to factor in a higher interest rate.
Both private and SSI disability income is usually an issue with any car loan but it’s an even bigger problem if the buyer has tarnished credit. For most borrowers in this situation, the only alternative is a buy and pay here, tote the note, dealer that offers in-house financing.
Credit-challenged borrowers currently in a Chapter 13 bankruptcy typically won’t qualify for a new car lease (and they will have to petition the court, through the trustee, in order to purchase a vehicle). The good news is that there are programs out there that will allow them to reestablish their car credit.
Subprime lenders set minimum income levels to give borrowers the best chance to reestablish their auto credit by creating a realistic budget for their car payment.