BAD CREDIT CAR LOANS

WHAT SHOULD I BE AWARE OF BEFORE INQUIRING ABOUT BAD CREDIT CAR LOANS?

Start by researching your credit score. Be aware of every detail in your report. In some situations where there are circumstances with really bad credit, dealerships will not always give you a choice of vehicles. Remember that getting approved for a vehicle is a privilege, not a right. Work on your car loan first, and then choose your vehicle. A car loan, when approved, will increase your credit score as you are making payments on time.

DOES MONEY DOWN HELP?

Providing money down on your car loan for bad credit improves your chances of getting the loan approved. Since you are considered a liability to the bank, you are showing the lender determination towards your loan.

WHAT WILL THE BANK REQUIRE FROM ME?

Most subprime banks will have requirements for you to meet. Make sure you bring these with you to the dealership when signing your loan!
· Proof of income (current paystub)
· Proof of residence (utility bill, phone bill, or something that states your name and address)
· Proof of insurance (insurance card)
· Drivers license (current address)
· References

WHAT DO BANKS LOOK FOR WHEN LOOKING AT MY INCOME?

While subprime banks are diverse, the mostly all require the person applying for the loan to have stability at their job for at least 2 years or more. This also applies with your address too. Stability at your residence and employer show the lender that you are consistent. Lenders take into consideration your gross (year to date), when reviewing your loan. There is no right or wrong income, do not let that discourage you.

I HAVE A BANKRUPCTY ON MY CREDIT REPORT, WHAT DO I DO?

Bankruptcies come with different scenarios, whether it be due to divorce, loss of job, or in over your head. Most subprime banks are willing to work with your bankruptcy. Bring a copy of the letter from the judge stating your approval limit for a car loan.

CAN I PAY MORE ON MY CAR LOAN?

Absolutely! Make out two separate checks; one for the car payment, and one stating principle payment only. You are still making your payment, but you are also reducing the principle.

WHAT IF I NEED A CO-SIGNER?

Having a co-signer does not always guarantee that your loan stipulations will be perfect. You may still need cash down. It is always a good idea to have cash down. Paying your car loan in a timely manner will improve your credit score. This means the next time you apply for a car loan, you should be able to accomplish the loan by yourself.

I HAVE NO CREDIT!

Having no credit is often worse than having bad credit. There are banks that will work with you and give you an opportunity to build your credit report. Lenders are looks for 20% of the amount you are looking to borrow.

I HAVE A TRADE!

Trades do help your loan. Some things to keep on in mind are making sure your trade is paid off. The last thing you want to be worrying about is a pay off. Keep the loan process simple.

I HAVE A REPOSESSION!

Having repossession is marked on your credit report. Generally speaking, having 12 months gone by or a zero balance needs to be listed for banks to consider the application. Don’t let this discourage you from applying for a car loan. There are recent repossession banks that will work with you. Keep in mind that higher interest rates will apply.
Some guidelines are looser with the addition of subprime banks. Do not be afraid of applying for a bad credit car loan. Go into this process knowing that you are not the only one who has had a problem with credit. Subprime banking is out there to help you with your bad credit car loan.

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