Is your bad credit history stopping you from getting the personal ride you desire? Customers with a bad credit history aren’t necessarily bad people, it’s probably just an indication that they have been through difficult situations. A lot of people now understand this and that is why loan lenders have made provisions for bad credit car loans.
Today Credit unions, banks and finance companies now provide bad credit loans more readily. People can now meet the requirements for a bank credit loan easily compared to a few years ago. With Auto Loan Service,you can now enjoy a ride in your own car even if your credit report doesn’t look so good
The first thing a borrower with bad credit should do is to get a credit report. A credit report is a detailed report of a person’s credit history. A credit score which is a 3- digit number is allotted to every borrower based on his performance with loans in the past. Lenders use credit scores to assess the potential risks involved in granting you a car loan.
Equifax, Experian and Trans Union which are all credit bureaus typically have a copy of all credit reports. Fico scores is used by many lenders and a Fico Score in the range of 580 – 500 and below signifies bad credit and this means that you will need a bad credit car loan if you want a car. It is pertinent for borrowers to know their credit score to prevent lenders from taking advantage of their ignorance
Once you know your credit score you should understand the process of getting a bad credit car loan. Typically getting a bad credit loan is almost similar to getting a normal loan except that you would have to pay higher interests and down payment fee. Interest rates for bad credit car loans are within the range of 5% – 26% and typically vary depending on your credit score.
Bad credit car loans are usually short term loans repaid over a period of 2-5 years. Depending on the degree of your bad credit down payment can range from 20%-50%. A down payment offers borrowers the opportunity to negotiate favourable interest rates. It is pertinent that a borrower is knowledgeable enough to avoid paying more for bad credit loans. The bad credit loan amount you should apply for is the total amount of the real cost of the car you intend to purchase and the dealers profit. Make sure you can afford this cost.
Beware of lenders that make false claims, some lenders are not really ready to take the risk. Before you opt for any bank credit car loan make sure you search for and compare all the available bank credit loan options. Be attentive to the terms and interest rate offered by lenders. Getting a bank credit loan shouldn’t necessarily mean acceptance, if you are unsure about repaying the loan then you shouldn’t borrow until your financial condition has improved.
Performing well with your bad credit car loans can make your credit report better. With a good plan you are likely to find a good bad credit car loan to finance your dream ride.