The Best Ways to Get Bad Credit Car Loans

This specific Hub is all about bad credit car loans. You are seated in the car dealers showroom. Waiting around to see the automobile financing manager concerning the totally stunning vehicle you've decided to purchase. The manager eventually arrives and says, ‘I have some not so good news for you. The lending company has declined your loan because of issues in your credit report'. Your heart sinks right down to your feet. A low credit rating has shot down your dream. Welcome, to subprime financing.

Subprime lending is for people who have blemishes or problems on their credit report. In today's economy a low credit rating is not uncommon. Getting loans with bad credit is not impossible. Every lender has different criteria for what is subprime loan. Subprime lending does not mean you cannot get a loan. It means you will probably pay a higher interest rate, and/or be required to put up a larger down payment than a person with excellent credit. Lenders tie interest rate to perceived risk. The more risk involved in the transaction the higher the interest rate will be. A larger down payment lowers the amount of risk involved. An example is; you’re buying a $10k automobile and you put up a $3k down payment, then the lender sees it as they have only a $7k loan at risk on a $10k automobile. Conversely If the lender were to lend $10k on a $10k automobile, this would be a much riskier transaction for the lender.

Get a copy of your credit report and check for errors. The official site setup by the 3 credit bureaus to satisfy the governments requirements for free credit reports is www.annualcreditreport.com. All other free credit report sites are commercial sites design to sell you something. The credit bureaus make errors just like the rest of us. An erroneous entry may be lowering your score when it should not even be there. A more subtle error is when a credit card account states it was closed by the issuer when in reality you the borrower, actually closed the account. When the issuer closes an account this means the borrower has done something wrong. This carries a completely different meaning to the credit reporting agencies.

Credit scores are a moving target. An extra payment or paying off one of your credit cards may be enough to change your score. Credit card balances are best when kept under 50% of the credit limit. It’s also possible that you’ve paid off a prior loan and it’s not been posted on your credit report.

Shop Around for a better loan. The dealer makes money on financing you. You might get a better loan from your own Bank or Credit Union. Credit Unions may be more lenient and understanding about any financial difficulties you have had in the past. Lastly look online for a national lender that specializes in sub-prime lend and may give you a better rate. there are many lenders that specialize in loans for people with bad credit.

Check with family and friends. You may find a family member or friend willing to co-sign your loan or lend you enough money for a substantial down payment.

The final options are to not buy the car and work on improving you credit score before you purchase. Or pay the higher interest rate loan payments on time for the next 2 years to improve your credit score. Then refinance the loan at a lower rate and smaller payment.

Get multiple Auto Financing in minutes. Like LendingTree, a similar site, MoneyAisle is completely automated, MoneyAisle applicants have a choice to pick an institution or decline them all without having to receive aggressive broker/lender calls.131 lending institutions are ready to instantly make offers on your auto loan. Shop for the best rate and deal. This national firm can help you get a loan regardless of your credit score.

After you buy your car, you're going to need Auto Insurance. InsuranceAgents.com is a consumer website where anyone in the US can compare insurance quotes from local agents and save $100’s on their insurance each year. Many of their agents are from nationally ranked insurance providers. Save Money on your auto insurance.

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