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Sat, Jul 23rd - 2:33AM

Subprime Auto Financing - 4 Useful Tips to Get Better Rates

If you are a prospective auto buyer and have poor credit reports as your asset, it is natural to wonder about financing the purchase of the car. Sub-prime auto financing is the solution for such people.

This type of vehicle financing is most suitable for people who have credit scores below the marked standard or have a recurrent history of delayed payments and or have filed for bankruptcy recently. People with credit score above a standard credit score for car loan approval are known as prime borrower whereas people with credit score below that are known as sub prime borrowers. However, there is no fixed credit score to bifurcate between the two as such, as it varies from lender to lender. Hence it is advisable for people seeking sub-prime automobile loan to take an initiative to get proper information before applying for the loan.

I have explain below few points which if taken into consideration by people applying for auto loan with bad credit can help them securing much better rates than they would obtain otherwise.

Credit History: If you are considering a credit purchase, then you should know that your credit scores play an important role in getting the loan. When you go through the credit report, look out for discrepancies and inaccuracies. Knowing your exact credit rating is therefore, essential. If you find an error, report it to the concerned credit agency and get it corrected. Further, make an attempt to improve your score through regular monthly payments of the existing credits.

Down Payment: Availability of the particular auto loan gets simplified if you can put a large amount of down payment. It not only helps you to negotiate to lower the rates of interest but also brings down the amount of monthly installments. Combined effect of low interest rates and high down payment automatically reduces the amount that you will have to pay every month.

Search for Lenders: Once you have decided on how much you can actually afford to pay every month excluding your prevailing expenses, it will be easy to find the suitable lender. It is better to have auto loan approved before approaching a dealer for negotiation or to ask for loan from dealers. You may find some banks, credit unions, manufacturers, and even private financial institutions ready to offer such loan. Though the traditional financial institutions and banks are reluctant, there are lenders that will be willing to provide you with the credit if you have a both checking and savings account and a large deposits with them. Even if you are a member of any of the credit unions, you may find them relaxing their standards to help you out.

However, if you have no such advantages that can bail you out, try to find subprime auto lenders online who will be more than willing to give you the loan. Though Internet can provide loan with less problems, you will have to be very careful and check their authenticity before letting them know your sensitive information. Otherwise, it can be a big threat to your identity and position.

Negotiation: When you have zeroed in on the lender, it is time for a frank discussion. You will need to provide all your information honestly. Do not be embarrassed about your poor credit history. Accepting it and acknowledging it will help you to face the lender with confidence. It will also help you in staying firm in your expectation without getting intimated by them.


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Sat, Jul 23rd - 2:30AM

How to Secure a No Cosigner Auto Loan?

When you are trying to purchase the much needed car to make your life a bit easy, you stumble upon the word "co-signer". Co-signers are people who offer guarantee to pay off the loan in case of your default on the payment by signing for you in the auto loan application. They can be your parents, relatives or friends.

Having a co-signer has its own advantages. It acts as a risk protection for the borrower and thus lenders tend to favor them. The lender feels assured that the risk is not too high. The amount of vehicle loan is also based on the credibility and annual income of the co-signer. The rate of interest offered by the lenders are also comparatively less.

However, inability to secure a co-signer for yourself should not stop you from applying for auto financing. No cosigner auto loan is one of the many methods you can get the loan for the dream car of yours. It can suit your purpose and help you accomplish your goal. When you set your mind to get auto loan without a co-signer, there are some factors that you need to consider:

Income: Absence of a co-signer may not at all be a problem if you are working and if you have a stable source of income. The lender may ask you to show income proof, and then you will need the pay stub. So keep your pay stubs safe. You may also need a employment certificate which will help the lender to ascertain the risk and accordingly offer the rate of interest. If you find it too high, try to negotiate. If discussions fail, do not get tensed, simply move on to the next lender.

Good credit scores: The requirement of the co-signer arises from the scare that the lenders face regarding the payment of the loan. If the borrower has good credit scores, the risk perceived by the lenders reduces. Then the applicant has a better chance of getting the desired amount of the loan amount at lower rates of interest. So if you are thinking of buying something on loan, try to make your payments on previous credits in time and definitely without default. It will prove worthwhile in your credit ratings. However, if you already have bad credit scores in your financial report card, then try the various lenders who are willing to finance bad credit auto loans without a co-signer.

Down payment: The availability of the loan also increases if the applicant can provide a substantial amount of money down. If you have a good amount of free reserves with you that are lying idle, you can use it making down payment for your car. It can get to start off with an advantage. Additional guarantee is then not required, moreover the lender will be ready to negotiate the terms to suit your preference. The idea behind is that if a person is ready to part with large amount of money at the beginning, he will be keen to pay off the rest of the car loan and own the car as quickly as possible.


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Thu, Jun 23rd - 11:53AM

Automobile Refinancing - Understanding Auto Loan Refinance and Its Benefits

Auto refinancing is a concept not many are familiar with. People come across ideas of refinancing a home, but refinancing a car may not be common to many ears. If you have bought a car some years back, you might find it difficult to pay the monthly payments of the loan now. In such case the key to relax and end your worries is auto loan refinancing. It can be an effective method and beneficial to stabilize your strained economic conditions.

Process: This process is similar to that of mortgage refinancing. Generally, people with higher rates of interest on automobile loans start looking for options when they find the monthly payment amount unbearable on their pockets. With the help of this process, the person or the borrower can reduce the burden by taking another loan to finance the payment of precious loan. The two main reason of auto refinance can be either to get a lower interest loan or to get a loan with longer term than the original loan. While each of these can be opted individually, they can also be opted jointly.

With an automobile refinancing, you take a new loan whose interest rates are lower than the prevailing one; wherein your new lender pays off the previous loan and offers you new loan with improved terms on the basis of current value of your automobile. Else you can take a new loan with longer period to pay the previous loan which can reduce your monthly payments to be paid. Thus, you end up with better credit facility even when you own the same car. In each of the above mentioned options, the main purpose is to reduce the monthly payment and make it affordable.

Credit Score: Credit score plays an important role in securing any loan. The lender simply checks your track record to assure himself of the credibility of the borrower. If you have better credit rating, it helps to get the refinance automobile loan at lower rates of interest. However, if you have made some wrong financial decisions in past and have a poor credit score to present, things may not be very smooth for you. Most traditional financial institutions will not be ready to provide you this loan because a higher risk factor will be considered in your case. Even then there is no reason to be worried because there are many lenders who are willing to offer people auto refinance with bad credit scores. The rates of interest charged may be higher than the normal but there is always scope of negotiation to bring down that rate.

It is essential not to delay the process because the more time you take, the bigger is the hole in your wallet. Therefore, all you will have to do is get your credit scores verified if you are not sure of it, then search for some automotive refinance lenders and apply for loan to them. As you get the offers, compare them to see if the monthly payments you will have to pay is lesser than the current one. If yes, then just go for it after confirming the formalities.


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Thu, Jun 23rd - 11:51AM

Credit Union - An Option to Get Bad Credit Auto Loan

Bad credit is alarming and definitely not a great thing to have in your portfolio but with changing times, its impact on your life has reduced. If you are thinking of buying a car and have just realized that you have a bad credit score, well do not panic. Every minute millions of people of America are searching online to find that perfect solution of bad credit auto loan with affordable rates.

And believe me the credit unions are actually trying to help you out by offering bad credit auto loans at reasonable rates. Wondering what is a credit union? It is a cooperative financial institution owned and controlled by its members whose business is to provide financial services and credit to its members.

While banks and auto dealers are nowadays equally enthusiastic about providing bad credit auto loans with attractive offers, you may have to pay a lot more because of higher rates of interest and longer periods of repayment. These financial institutions work with a motive of earning higher profits whereas credit unions serve their members by offering bad credit auto loans with reasonable rates.

Credit unions financing automobile have increased many folds in last couple of years because of their lower rates of interest and discounts. You can either contact credit union if you are a member of any or you can directly go to a local sub-prime auto dealer who offers you loan even with poor credit and gives you liberty to negotiate. After all loan is all about negotiation about rates. However it is better to approach a credit union because of their expert knowledge and professional service and you will know exactly where you stand.

You can get in touch with credit union online or over telephone or can simply walk into the nearest branch to seek information. There will be number of options open to you, but first ensure which bad credit auto loan program will work out the best for you. While dealers can get you that loan instantly, you will have to make rounds of the credit union to get that application for poor credit auto loan approved before you can give the check for the dealer.

Whenever you are applying for any bad credit auto loan, look beyond the attractive offers and do a proper search of their background even if it is credit union offering it. Make sure that you know your budget and check the payment terms so that you know that it matches with your payment options. If your bad credit loan payments are way beyond your affordability, it can actually bring down your credit standing further and this could be very risky while taking credit in future. And even when you have got the approval for your bad credit auto loan, do not handover the check before you have the deal in writing. If you do so, you are giving the dealer an opportunity to change the terms. Once you have the papers in your hand, now you can relax and be happy that you own a car even when you have a fair credit.


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Tue, May 24th - 11:57AM

Bad Credit Auto Loans - Precautions to Be Taken While Opting for Car Financing with Bad Credit

Do you have low credit scores or low income? Have you turned bankrupt? Are you unable to pay the down payment for the car of your dreams? Well if you have yes as an answer to any of the above questions, the bad credit auto financing is your solution. It is absolutely for those who have failed to qualify for loan application with traditional institutions like banks.

Many a times when people are opting for instant auto loans, they end up with more than they can afford. They enroll themselves in a series of delayed payments and high interest rates. And the people who already have a history of bad credit associate buying a car with trying times. Most direct lenders and auto dealers would not help them in financing for their car and if they agree, people with bad credit are expected to put in higher amount of down payment. But do not get too worried and disappointed. Planning is the key and bad credit auto loan can turn your dream into reality.

When you start planning, first review your finances carefully and then think up of buying a cheaper car with the help of your loan. Make sure that you can actually afford to pay the monthly payments of the loan on time. This will help you to build up your credibility and gain a respectable position. Once you reach that level, you will have better credit scores. Now you are ready to apply to banks and other financial institutions for bigger loans for buying that dream car of yours and that too at lower rates of interest.

Nowadays many banks and dealers are offering bad credit auto loans with attractive offers. Before stepping into any of such offer, inquire properly, else you can end up jeopardizing your position. Since bad credit is not given much preference, the interest rates are generally very high. The dealers will convince you to opt for such offers by lowering the monthly payments and increasing the period of repayment and you end up paying a lot more. So be prepared to pay extra dollars as interest. Even then do not ignore maintaining the credit level. If you do so you are actually putting your dream of purchasing the dream car at risk. So now you get the idea that it is a misconception that bad credit makes your wish of owning a car impossible. Rather bad credit only makes it bit more expensive as you shell out more money for longer period of time at higher interest rates. But then there is a reward to this whole process - your car.


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