Bad Credit Car Loans

Applying For A Bad Credit Car Loan

Applying for a bad credit car loan can be an embarrassment and even a nightmare if attempting to borrow through the traditional channels of bank and credit union financing. Millions of Americans have been hit very hard by the economic collapse, and often through no fault of their own, their credit has taken a real hit.

For those in this situation, with poor credit, limited cash, yet with a legitimate need for a new car, or at least a decent used one, it might seem hopeless. The good news is that it’s not – there are still resources available for funding a bad credit car loan, even with this economy. The key is in finding a reputable independent lender who will be willing to finance a vehicle for you – and there are many.

You will have to pay a higher rate of interest, but typically will be able to refinance within a year, so this isn’t such as big of a drawback as one might think. There are many companies and individual lenders which are still financing new and used vehicle purchases with whom your past credit simply won’t be as big of an issue as it would be through conventional financing.

There are several reputable, BBB approved online companies who are engaged in the business of matching lenders with potential purchasers, and many of these companies deal exclusively with those who have problem credit. What these brokers do is simply pass on your information to the private lenders and financial institutions who specialize in making bad credit car loans. This information will include your income, the type of car you would like to purchase, down payment information, and a few personal details.

The companies offering these types of loans are of course in business to make a profit, and so due to the higher risk, will of necessity charge a higher rate of interest. But down payments can be very minimal – under $1000.00 – and you will be able to finance a suitable vehicle, with a payment you can afford and terms you can live with.

There is no reason to take the bus or drive a clunker that is constantly breaking down, and there has probably never been a better time to buy a used or new vehicle, regardless of your credit; it seems these days that the entire country is on sale, and that holds especially true for big-ticket purchases such as automobiles.

Obtaining a bad credit car loan will help you in more ways than simply being able to have a dependable vehicle again. The biggest advantage to you in obtaining such a loan is the opportunity it gives you to rebuild your credit. Even with a bankruptcy, if you obtain credit and begin making timely payments, your credit score will bounce back quite rapidly; well before the 3 or 4 year payment terms are met.

You can have good credit in a year or two after starting fresh, so if you need a car, it really is to your advantage to apply for bad credit car loans. In less than a couple of years after starting your payment plan, you’ll be able to refinance with a conventional loan, as well as be able to begin financing other purchases without the penalties that come with bad credit.