Before applying for an automobile loan, make sure you do your research. Consumers interested should first review their credit scores to determine whether or not they can afford the loan. A bad credit score can to lead to paying more for a loan or even denial of receiving one. If you are looking to get a low interest rate on your new vehicle, start building your credit to improve your score. Start by paying creditors on time and don’t skip monthly payments. If you have several credit cards, pay down the balances.
If you have credit problems or a poor credit rating, you can still obtain an auto loan. A bad credit auto loan is a type of loan that provides you with the finances to purchase a car but also becomes a means of developing your credit ratings. A bad credit auto loan serves as a tool to re-establish your credit and can be extremely advantageous if managed correctly. According to PR-inside.com, “The requirements for a bad credit auto loan are quite strict, which is understandable due to the fact that it is offered to individuals who demonstrate a poor credit history. First, you must have a well-paying job or any source of income which is sufficient to cover your current expenses like monthly utility bills. Of course, your income must also be enough to pay the loan amount, as well as and other costs pertaining to the maintenance and insurance of your vehicle. So, as long as you have an adequate and steady income source, you could still obtain a bad credit auto loan, despite having a poor credit rating. The lender would also look into how long you have been employed; if at least you have been in your current job for a year, you have better chances of getting approved (2009).”
Having a downpayment is a great way to get approved and receive lower rates. A downpayment means you finance the car for a lower amount, therefore giving you lower monthly payments. Make sure before deciding on a loan that you have shopped around and gotten several different quotes from different lenders. You can do it online or by calling numerous lenders or an auto loan broker, which will give you quotes from multiple lenders.
Sources: http://news.carjunky.com/before-applying-for-auto-or-mortgage-loans-cdh775.shtml
http://www.pr-inside.com/low-interest-rate-new-car-loan-r1543029.htm
http://www.pr-inside.com/basics-you-need-to-know-about-r1539697.htm
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