We go over a few more of the requirements lenders usually stipulate when buyers applying for an auto loan have past credit problems
Wrapping it Up
Here at Auto Credit Express we've spent the past week or so going over some of the requirements faced by car buyers applying for car loans with higher-risk lenders including income, debt, credit background, trade-ins and down payments.
Today we're going to wrap up this basic overview by going over a few more topics that need to be discussed.
As it applies to problem or bad credit auto loans, stability is the watchword. These lenders like consumers that, in a perfect world, have lived in the same area and worked for the same employer forever. Since this usually isn't the case, all things being equal, the longer an applicant has worked for the same employer the higher that person will score with the lender.
Multiple employers will result in a lower score, but this can be somewhat offset or if the applicant switched employers for an increase in salary. Short job tenure can also be balanced by employment in the same field as well as stability in other areas such as home ownership or time at a residence.
Even subprime lenders will typically not finance consumers with either open or multiple bankruptcies. So while many will consider someone with a discharged Chapter 7, only a few will consider someone in an open Chapter 13. Even then, a court order to incur additional debt is required before they'll review the application.
This can get sticky since, in many cases, car dealers don't want to be put through the hassle of finding a car and holding it until the petition is approved and the order is received from the court. One more thing: the order can contain limits on a vehicle's price as well as the maximum interest rate allowed – something lenders dislike as it may fall outside their program guidelines.
As most of these lenders work through auto dealers that work with poor credit, they won't finance a vehicle from a private party. They also will not finance commercial vehicles, conversion vans, motor homes or any vehicle with a branded title (i.e. - salvage, rebuilt, flood damage).
Finally, we need to bring up the topic of accuracy. In this case, it means that consumers need to be prepared to back up anything stated on the application (residency, wages, employment) with proof.
As we've stated in the past, this is not the time to begin a career in "creative writing."
The Bottom Line
If you have credit issues, everything else being equal, the more stability you can prove the better your chances of a loan approval. In addition to stability, the type of vehicle you're considering as well as who you plan on buying it from also enter into the equation.
Likewise, bankruptcy situations as well as application accuracy are also important.
Finally, there is one more thing to consider: at Auto Credit Express our business is to help applicants with credit challenges find those dealers for their best opportunities for auto loan approvals.
So if you're ready to take the next step, you can begin by filling out our online car loan application.