The latest credit trends are a mixed bag for problem credit borrowers. On one hand, lenders continue to work with
credit-challenged borrowers. On the other hand, average loan amounts are escalating, which translates to an increase in the average interest expense of these loans – something that should be avoided.
To say that the loans issued by American Web Loan are predatory is putting it mildly – the interest charged by most payday lenders pales in comparison. The mere fact that tribal lenders can ignore the majority of federal and state lending laws should be a wakeup call to anyone considering this type of loan.
The latest report from the NCUA shows that credit unions continue to increase their share of vehicle lending. The issue
that buyers with damaged credit face is that credit unions, as a rule, don’t buy as deeply as subprime lenders. But having said that, it never hurts to give your local credit union a first shot for a car loan.
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.
If you have problem credit, chances are you’ll end up applying for a car loan at a dealership that works with a broad range of lenders.
How you find that dealer is up to you, but here at Auto Credit Express we want you to know that for over twenty years we’ve been helping customers just like you locate car dealers that can offer the best opportunity for auto loan approvals.
Although the subprime market continued to grow during the first quarter of this year, the increase in repossession rates is sure to cause these finance companies to moderate the pace of lending. If this happens, borrowers with larger down payments (with cash down or real trade equity) who are willing to consider a range of affordable vehicles will have a much better chance of receiving an auto loan approval.