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Car Financing And How To Buy A Car With Bad Credit

27
Jul

How bad is your credit? Is your lack of good credit restricting you from access to cheap auto loans? While having less than perfect FICO scores means you won’t qualify for the best car financing deals, there are still auto loan options for car buyers even if you are unemployed, bankrupt and need to finance a car with bad credit. Read on to understand how you can buy a car with no credit using financing schemes for people like you. When buying a car for the first time, it is important to understand what it means by an auto loan with bad credit or no credit – it implies poor FICO rating of that person. This could be a result from poor payment history like exceeding card limits, skipping payments or being made a bankrupt.

I Am A College Student And I Need A Student Auto Loan No Credit

If you are a student or newly graduate looking to buy a car with a student auto loan or under 21 car insurance, loans under this category are simply termed as – no credit student car loans. This assumes that a college student is someone with no borrowing history, since they have yet to start working, or get a credit card or personal line of credit, etc. Things that give them the chance to build credit history. I started off my younger siblings with small personal loans pay over monthly installments to help them establish credit easily.

Where Can I Get A Car Loan With Bad Credit

If you have bad credit you may find it difficult to obtain a car loan through a bank or traditional finance company, nevermind cheap vehicle leasing. Most banks are only willing to give low rate auto loans to people with a stellar FICO report. According to research done recently, only one out of ten auto loan borrowers with FICO scores of 620 and below qualified through a car bank loan. And there are many who are equally rejected through credit union car loans and those directly from auto manufacturers’ finance companies. In such unfavorable climate, a car-buyer with bad credit should consider an auto dealer or service that specializes in helping people to finance a car. It will save you valuable time and reduce inquiries into your borrowing/repayment history, saving you the embarrassment and distress from rejections, as these auto loan lenders are adept at working with people in different kind of credit situations.

When you need to purchase a car or truck with bad credit, there are car dealers who can offer a variety of loan terms and payment schedules. You may start off by searching on the internet for online car financing for easy auto loans, compare auto loan quotes, and negotiate the best car loan rates. Be careful of auto leasing lenders that claim to offer low rate financing to first-time car buyers with bad credit. This problem and low interest do not come together and when you buy a car on hire purchase through a car dealer’s in-house finance firm, you are required to make a big down payment, along with a high financing APR.

Finance A Car With $1000 Down Instead

The risk with high interest car loans is if you decide to sell the car before finish paying up the full loan, the amount you receive from the sale may be far less than the amount you need to settle the auto loan. If you use a bad credit car loan to finance a new car, you will also bear the financial loss from depreciation. Instead of looking for that BMW car finance, it may be better for you to settle for a bread and butter type of car, preferably a cheap used car from a buy-here-pay-here car dealer. You can also borrow from online legitimate payday loan lenders to get money for the downpayment.

Besides, if the new car is repossessed or to be scraped because of an accident, you may be obligated to pay a considerable amount to repay the loan if your car insurance is not adequately covered. If your budget is tight, have bad credit where it is not easy to avail low interest car loans or cheap car insurance, you may want to consider saving up first or settle for a cheap used car under $1000.