Credit and debt counseling has become a booming business over the last few decades..
For many people, their most important dream is to own a home...
If you have amassed a rocky credit history and if you are burdened with a low credit score


Obtaining a Bad Credit Car Loan

If you have bad credit and are in need of purchasing an automobile, you do have options available to you.  There are resources available to you through which you can obtain a bad credit car loan.

Get Pre-Approved for a Bad Credit Car Loan

The best way to get a great deal of savings when purchasing a car is to get pre-approved for a car loan before you shop. This pre-approval puts you in the driver’s seat by eliminating the expense and pressure of dealer financing.  You will also not have to sacrifice dealer rebates to get their lower interest rate because you are already approved for a loan and don’t need their financing.

Pre-approval on a loan will tell you just how much you can qualify for before you go car shopping and will know exactly how much you need to put down for the loan in advance.

Credit Scores and a Bad Credit Car Loan

Credit scores determine just what type of interest rate you will receive.  If you have a low credit score, you will be paying the least favorable interest rate when you purchase a vehicle.  Although, often times people will make the higher interest rate payments for several months and be able to refinance the vehicle and get a lower rate once they show they are paying the payment on time.


 


Dealership Financing and a Person with Bad Credit

Dealership financing is most common but dealerships look for people who have good credit and show a history of paying their bills on time, so if your credit score is low, you may need to purchase a vehicle from a dealership that specializes in giving customers loans that have poor credit ratings.  There are many such companies and dealerships to choose from.

All lenders and dealerships will although look to your capacity to repay the loan.  In other words you will need to show income from employment.  Secondary income such as child support is taken into consideration.

Collateral and Your Bad Credit Car Loan

Collateral is what secures a loan and with the purchase of an automobile, the collateral is the vehicle itself.  This secures the loan so that should you default, they have recourse to get the vehicle back.

Dealership financing often holds appeal because it is easier to qualify for than a bank loan.  There are dealerships that solely work with people with credit issues.  These dealerships offer financing for almost anyone.  The loans do come at a premium, as the rates are very high.  They also require that you put money down and they finance you with either their own lending company or a lender that they work with.  These dealerships have a variety of vehicles to select from but the price on the vehicle is often quite high and then the interest rate on the loan is high so guess who really makes out in this deal.

>> List of Bad Auto Loan Lenders