Before you decide to cosign for any loan, but especially a problem credit auto loan, you should know the issues you could be facing.
We tend to watch for this type of news after almost two decades of involvement in bad credit car sales here at Auto Credit Express.In fact, we even designed a web site so applicants with bad credit can learn about tote the note dealers, repossession and today’s topic, the general state of no credit auto loans.
If you have bad credit you may be wondering if you qualify for a sign and drive loan that requires little or no money for a down payment. We know the answer because we’ve been involved in bad credit car sales for close to two decades here at Auto Credit Express.
But if your credit score falls below 640 or if you have a limited credit history and no co-signer, the issues of finding a lender and getting an approval are more difficult.
There are over 30 national or regional lenders that offer a poor credit car loans and their lending requirements can vary widely.
The biggest issue for poor credit buyers, however, is that practically all these financial institutions only loan indirectly. In order to request a credit decision, you’ll have to submit an application through a franchised new car dealer that has signed up with them.
But even after you’ve been approved there are issues that can bring the loan process to a halt. One of them is the required identification applicants will need to bring in order to take delivery of a car.
Just about all bad credit car lenders require that you have a down payment in the form of cash or real trade equity. That’s because lenders look at it as a way to increase the likelihood that you’ll make your loan payments.
According to their October 6th Credit Trends report, “Lenders continued to increase their appetite for risk in Q2 2011, with new vehicle loans for customers with credit outside of prime increasing by 22.4 percent compared with the previous year. In Q2 2011, 22.29 percent of all new vehicle loans went to customers in the nonprime, subprime and deep-subprime categories, increasing from 18.21 percent in Q2 2010.”