Bad Credit Auto Loan Financing – How to Get Approval For Your Loan

Posted by Credit Financing Guru

Owning a car is something that most people around America have the luxury of doing. Even people who have low credit scores still have the opportunity to get access to automobiles. Due to the recent decline in the auto industry, there has never been a better time to own that car of your dreams. Getting bad credit auto loan financing has never been easier if you are willing to look around.

The key to getting any car loan approved is to show the value that your loan offers to lenders. Because the auto industry is very competitive, most lenders are willing to work with people who don’t have the best credit rating. This usually means that you can get very competitive interest rates if you find the right lender.

One thing that you can do if your credit history is extremely bad to get a loan approved is provide collateral. By providing collateral for the loan, you are reducing the risk that lenders bear when they approve your loan. The less risk that the lender bears, the more willing they are to approve your car loan with a good interest rate.

When it comes to finding the right lender, you should use the internet. Bad credit auto loan financing is possible if you are willing to look at the different lenders that are available. You can get comprehensive quotes from different lenders to ensure that you get the best interest rate possible. Remember that you will need to look around in order to get your loan approved.

If you are looking to get a Bad Credit Auto Loan the first place you should look when it comes to getting car loans is the internet. Get a comprehensive quote from an Online Loan Lender to ensure that you get the best interest rate possible for your loan.

Bad Credit Auto Financing FAQ:

Question: Auto loan, but no credit history? How do I get one?
Is there any way for me to get a loan for a used vehicle? I have no credit history. I’m employed part-time with $5k-$6k annual. I need a $4k loan.

My bank (USAA) will not finance me because I have no credit history (good or bad). They said I need to build up credit over a year or more before I’m applicable for a loan. Does anybody have any ideas?

Answer: Best thing is to get a co-signer to help get you a loan, usually if you are buying through a car dealer it is easier to get a loan, than a regular bank. The loan will help build your credit as long as you pay on time.

If you are talking about a regular purchase from another person, it is more difficult to get a personal loan that way.

Question: Am I a bad risk (auto loan)?
I have been trying to secure a loan via my banks and was denied. I have been working for a little over a year at a Ford Dealership (mechanic) with a gross income of $25,000. My credit score is 762-750 depending on which company is contacted. I have paid off cards (2) and one student Sally May loan out ($1500) that I won’t start paying for another 3 years (due to agreement terms.) I am trying to secure a used 2008 GM certified Vehicle that is list price of $26k but I beleive I can easily wiggle down to about a final price of $22k. I have yet to try the dealers financing which I assume would be harder to obtain then the banks.(?)

Answer: Auto finance is what I do for a living and it comes down to simple math. You make $25,000.00 a year divided by 12-months is $2,083.00 most major lenders on allow 16% of your gross monthly income for a car payment so all you qualify for is a $333.00 payment. There is no way you can afford a $22,000.00 vehicle period.

Even with good credit your looking at a payment around $440.00 a month.

Question: How can I get real Auto Financing?
I need to get a car, I don’t have any credit, but I have like 3 jobs. any one know of any good auto financing places online?

Answer: CapitalOne, Lending Tree, and eLoan are good online companies for people with good credit. You may have trouble, however, if you have no credit or bad credit. You may have to look for subprime lenders, which are harder to find, and expect to pay high interest rates and make high down payments.

Question: Where can I get auto financing with co-signer but insurance on the principal applicant only?
I have limited credit score so my dad is co-signing to get my auto financing application approved, but I need the insurance on my name only? is it possible?

Answer: Well, if the COSIGNER is NOT a co-owner, then anywhere. But if the cosigner is also CO OWNER, then they can be sued, regarding your car! That means, they need to be INSURED for the damage the car does!!

If you don’t want him listed to DRIVE your car, you can always specifically exclude him from coverage. But, if you need a cosigner for the loan for your car, most likely, the insurance is going to cost you more than the car loan, and if you have an accident the first two years, your car won’t be worth as much as your loan payoff.

Question: How does bank auto financing work?
I went to a bank in order to get preapproved. The banker told me everything was fine and that they need a car purchase agreement and letter of origin and proof of insurance. I don’t get it. How do I get these things without actually buying the car? And how do I buy a car without having some kind of financing already in hand when I am ready to buy? Can somebody explain the process?

Answer: The process is very simple. Shop around until you find a car that you like. Negotiate your best price with the dealer. When you are comfortable with the deal you are getting, you will sign a purchase agreement. You then have to obtain a certificate of origin for the particular car you are purchasing to prove that the vehicle exists. You will also need to arrange insurance to be effective the day you are to pick up the car. Bring all of this to the bank and they will arrange to pay the dealer for the vehicle.

Question: What’s the best way to get auto financing with minimal credit history?
My FICO score about 4 months ago was about 650, I’ve since cleared up some bad marks, so I’m guessing it’s a little higher now but I haven’t checked to be sure.

I’m a recent college graduate just about to start a full time job, and I really need a new car. Are there any reliable online lenders I should look to? Or should I stick with dealer financing? I already tried Capital One and they denied my application based on lack of credit history and one bad mark I have on my credit history.

Answer: Many car companies like Honda & Toyota offer incentives for recent college grads, perhaps their in house financing (American Honda, Toyota Financial Svcs) also offer discounted finance rates. As far as being a first time buyer, many banks such as Cap One are going to need you to find a cosigner. Go to the dealer and if you have a 650 FICO (you must have SOME credit or else you wouldn’t have a score) you should fit into a first time buyer program offered by one of the many finance companies they work with as long as it isn’t a little Mom & Pop dealership.

Question: Where do I go to get auto financing?
I am in need of auto financing that I can take anywhere to get a used car. I have a low credit score and I live in michigan. I am not interested in a dealer. I already have the car but they only use outside financing.

Answer: A local credit union would be your best bet. I think some of the online companies like HSBC Auto still do loans with lower credit scores, but your rate will be very high if your credit isn’t good. Nobody is giving loans to people with really bad credit right now.

Question: What does my minimum credit score need to be to get auto financing at a good rate?

Answer: 750 for the top deals. That’s the low down payment or lease deals. You can still get a pretty good rate above 700 but probably not the zero or $299 down deals some dealers advertise.

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Categories: Auto Financing
10Oct

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