Bad Credit Auto Loans Approval Secrets

Bad Credit Auto Loans – The Secrets To Approval

Bad credit auto loans are still obtainable, even in this economic climate. There are still millions of cars for sale, and millions of buyers, many of whom have become credit challenged due to economic circumstances beyond their control.  If you find yourself in this boat, don’t despair. There are lenders who will work with almost any situation. To be sure, you will have to pay a higher interest rate, but once you have reestablished yourself as a timely payer, you will eligible to refinance at a lower rate. The important thing is to be able to find wheels, and this article will show you three methods to obtaining a car loan even with bad credit.

Secret 1 – Obtain Private Seller Financing

The first method is simply to use seller financing. By doing a search in the Sunday classifieds, or in Craigslist online, it is relatively simple to find a private party who will take payments. Simply search the private listings, using keywords such as ‘payments’ or ‘will finance’.  Performing this search on the Seattle Craigslist, I was able to find a great car in which the owner would take 1000 down and 300 a month for 6 months. You’ll simply need to find a flexible seller, reach agreeable terms, write up a bill of sale, then make payments as agreed. Having a small down payment is important, and you should also realize that this won’t improve your credit score, as it won’t be reported to the agencies. But if your primary concern is finding cheap wheels, this is often a great way to go.

Secret 2 – Finding a dealer who specializes in bad credit auto loans

Find a dealer who specializes in bad credit auto loans. In most cities, you will be able to find more than one dealership who specializes in bad credit auto loans. However, it may be to your benefit to shop around extensively, and if you don’t live in a large city, to visit one, as you will be able to find a better selection, and better dealers as well.

Your best bet is to find a dealer who is both strongly reputable, has reasonable prices, specializes in bad credit auto loans, and works with multiple lenders as well as providing in-house financing.  When financing in-house, most dealers will ask for 25% to 50% down, with payments to be made over the course of a year or two. You won’t be getting a new BMW with terms like these, but you will, however, be able to find transportation.

Secret 3 – Finding a private lender who specializes in bad credit auto loans

There are many private lenders who will lend to bad credit situations for auto loans, but you will need to be able to prove a stable source of income, as well as make a small down payment, ranging from $500.00 to $2000.00, depending on the vehicle you are looking for.

These private lenders will usually limit financing to cars with fewer than 100,000 miles, and age limits on the cars may apply, depending on the lender.  However, you’ll pay a better interest rate than going through a used car dealer, and since you will have pre-approval, you’ll be able to shop around, rather than be limited to the selection of a specific dealer.  This is perhaps the most convenient option, as you can apply for bad credit auto loans online, and simply go shopping once you are approved.

While bad credit may be an inconvenience in obtaining an auto loan, it doesn’t make it impossible. With a little diligence and creativity, almost anyone can obtain automotive financing, even with bad credit.  Whether you choose seller financing, auto dealers who specialize in bad credit, or going through an online private lender who specializes in bad credit auto loans, with persistence you are almost certain to find someone who will finance a car to you.