Usually one of the first questions we get from car buyers with questionable credit is what interest rate they’ll be required to pay on an auto loan. And while that usually can’t be predicted, borrowers rarely ask what type of interest rate it is – something that could be equally as important.
For those unfamiliar with what the phrase “buy here pay here” means, it refers to a car dealer where you can not only purchase a car, but a dealership where you can finance it, right there, as well. In this case financing is arranged with money that is borrowed from the dealer instead of a bank, credit union or finance company.
Applicants with bad credit searching for online auto loans that depend on social security or other types of disability benefits for all or most of their income need to understand that this can pose a problem for most subprime auto lenders. It can, in fact, result in a denial of credit.
For people with poor credit it’s especially important that they thoroughly understand the auto loan documents they’re signing at the time of delivery.
It’s easier to understand the reason higher-risk lenders have employment requirements if you know the three basic requirements they look for in an applicant – ability, stability and willingness to pay.
Consumers with problem credit hoping to get approved for a car loan should be encouraged by the Equifax’s latest National Credit Trends Report issued earlier this year.