More About Bad Credit Car Loans

 Everyone deserves a second chance. Just because you may have a bad credit history doesn't mean you should not be able to get a car loan and put yourself back on the road. After all, it can be hard to get around these days without your very own set of wheels. In this article I'll talk more about bad credit car loans and what they mean for you.

What Is A Bad Credit Car Loan?

Some lenders out there will not loan you a cent if you have a bad credit history, no matter what it's for or what your financial position may be today. But don't despair. When it comes to car loans there are many lenders out there who are willing to give you a chance; financiers who specialise in loaning money to people who have a poor credit history.

So long as you can demonstrate that you are in a stronger and more stable financial position today, these finance companies will lend you the money to buy that car, despite your poor credit history.

You Are In The Driver's Seat

Loans of this nature are generally no different to a loan for a person with a good credit history. Many will finance 100% of the car's purchase price, interest rates are competitive, the lenders are reputable (think finance company, not loan shark), terms and loan structure are flexible in many cases, and loan approval times are fast.

You have control of your loan and you will literally be back in the driver's seat in no time.

What Are The Risks?

The same as with any type of finance. You are borrowing money, there is interest to pay on the amount borrowed and you are required to meet the repayments every week, fortnight or month, however you choose to structure it.

Some Quick Tips

1. Don't overspend. Purchase a car that is within your means to repay comfortably. Remember, cars cost money in upkeep, fuel, insurance and registration as well. It's not just the purchase price or being able to meet the repayments.

2. Do your research and only deal with reputable bad credit car loan finance companies.

3. Take your time and only commit to a deal that you are comfortable with.

4. If you are purchasing a used car, have it thoroughly checked out by a qualified mechanic before committing to the purchase.

Conclusion

A bad credit history doesn't have to spell doom and gloom for your borrowing future. In fact, successfully repaying a car loan obtained through a bad credit car loan finance company can be a great way to restore your credit score, making it easier to obtain finance for other things in the future.

Speed Up the Auto Loan Process to Avoid Reduction in Credit Score

 Happiness is the smell of a new car!

Buying a car is an emotional experience for car buyers. It is not like buying a phone or a television set. It gives a sense of fulfillment and satisfaction to car buyers. It is for this reason that many car buyers spend several months in selecting their dream car.

Once you have chosen a car model, finish the auto loan process without any delay. It doesn't mean that you should opt for the first auto loan quote that is offered to you by a lender. But, it is important to wrap up the auto loan process quickly.

Why should you finish the Auto Loan Process quickly?

You should not spend a substantial amount of time in choosing an auto loan because of the following reasons:

1. The dealer may sell your chosen car model to another buyer.

2. Interest rates may increase in the future.

3. The manufacturer incentives program may not be available in the future.

4. Any unexpected expenditure may cause you to delay the car buying process.

Credit Inquiry

Another important reason for wrapping up the auto loan process is credit inquiry. When you apply for a loan with a lender, you give him/her the authority to "inquire" a copy of your credit report. Credit inquiries have the potential to affect your credit score.

Rate Shopping - Is it harmful for your Credit Score?

Credit inquiries reduce your credit score but it doesn't mean you should stay away from rate shopping. Rate shopping is the act of obtaining interest rates from several lenders for a single loan type. The motive behind it is to choose the lowest interest rates from the available options.

It is important to remember that applying with multiple lenders for multiple loans such as auto loan, student loan, home loan, etc. doesn't mean rate shopping. Every such credit inquiry will reduce your FICO score by 5 points.

45 days is the Limit

FICO score considers all credit inquiries related to a single loan type within a time span of 45 days as a single inquiry. It means that you can apply with as many lenders as you want within 45 days in order obtain the lowest interest rates.

Don't take time for granted. As it is limited, try to take in the best from every moment. If you have decided to buy your dream car, do not shy away from making quick and calculated decision. Search for the lowest interest rates and sign the dotted line within 45 days.

Why Financing Your Car Loan at a Credit Union Is a Smart Choice

 When you're buying a new or used car, people typically go straight to the local dealership. While dealerships make their own financing programs sound especially attractive, it's always to your benefit to shop around for the best auto loan rates-starting with local credit unions. Here are some reasons why you'll find better auto loan rates and more personalized service at a credit union.

You have a much better chance of getting your loan approved if you have second-rate credit or have had some credit problems in the past. They will more likely listen to your personal story over a traditional commercial bank.

A credit union is different than a traditional bank or other lending institution. They offer loans and other financial services to people through a cooperative membership and it is much more than just a place to house a checking or savings account. They show their members financial interest as a high priority and they are not in business to sell their members anything just to inflate loan volumes. Best of all, their profits go back to their members in the form of lower rates on other products and services like savings and loans. There are 377 credit unions in California with over 1550 local offices. Overall, throughout the country, they save their members approximately $8 billion a year in fees, dividends, etc.

Most credit unions offer better rates to their members or other financial institutions. Especially the banks available through the local car dealerships. Whether you have a large or small down payment for your new or used car, they can educate you on the best possible deals for your auto loan. According to the latest report from Informa, the average rate on a $30,000 new car loan from a bank is 4.16% and from a credit union is 2.82%; which is a 32% reduction in rate and equates to a savings of $1,100 over the life of the car loan.

As a member you have access to educational resources. Almost every credit union has a member or resource center where members can educate themselves about financing options and how to evaluate the value of their vehicle purchase. If you are an inexperienced car buyer you can turn to them for an unbiased opinion. Most importantly, they can show you how to calculate the real value of the car you want to purchase, not just what the dealer tells you, which will ultimately affect your final decision.

Enjoy a member-centered approach. Since loan decisions are made by a local volunteer board rather than a corporate office, members have a more personal experience. This local approach gives you the opportunity to discuss your loan options, discuss flexible repayment choices, as well as review your entire financial situation with your personal loan representative. This type of personal interaction takes away the pressure of applying and locking in your financing and you can be assured they are working with your best interest in mind.

A car loan is helpful. But a good car loan can make a dramatic difference in your life. Financing your next vehicle with your local credit union can save you money, reduce worries and minimize hassles. They specialize in good car loans that fit your specific requirements.