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A Guide to Bad Credit Auto Loans

The Credit Resourceby Jason Lanier

Online Auto Loans -
There are good lenders online that are willing to help people buy a car with bad credit. This is a much easier way to get financing, than pursuing it locally. Car loans are secure loans and are easier to obtain with poor credit than credit cards and other unsecured lines of credit. Being able to get online to arrange financing is a great way to find lending options that aren’t available locally.

Overcoming Negative Credit Scores -
Beacon scores aren’t everything when it comes to car loans. Some financial institutions have very strict regulations, while others are more lenient. These types of lenders that specialize in helping people with bad credit, take more into account than simply what is revealed in a credit report. This includes income, job time and other factors. Even with a credit score as low as 480, it is still possible to obtain financing if one applies and meets certain basic requirements. (continued below)

A Guide to Bad Credit Auto Loans

Avoiding Predatory Loan Offers -
There are more secondary lenders than not, that make enormous profits from lending money at very high interest rates. These types of lenders should be avoided, for obvious reasons. Too often, car shoppers with low credit scores fall into the downward spiral of predatory lending, making it more difficult to recover. The best thing for improving credit, is working with a lender that understands your need to rebuild your credit with good financing terms. It does not help you to fall prey into the snare of high interest rates and fees.

Little to No Money Down Auto Financing -
Many people that have troubled credit believe that in order to obtain auto financing, they must have money down. This is only the case in circumstances where the price of the vehicle is not advantageous to the buyer, or in cases of in-house car financing. Arranging auto financing without a cash down payment is simply a matter of having the right combination of car, price, loan value and financing terms. It’s really very simple and good bad credit lenders and related lending networks can help you with this.

Avoid Buy here, Pay here Financing -
The most expensive way to purchase a car, truck, van or SUV is by buying at buy here pay here dealers. Car lots that offer in-house financing, or “tote the note” financing, charge really high interest rates and most always want a significant down payment. In many cases, a customer pays thousands more and sometimes more than twice, the retail price of a vehicle at these “tote the note” dealerships. The only case in which you should consider in-house auto financing, is if you are in a bankruptcy that is not discharged. Even so, it may be less expensive to rent a car, than to buy from one of these types of car lots.

Getting a Better Deal -
Some car dealerships, in fact most, make a practice of adding points to the approved interest rate of a customer, especially with customers that are buying cars with bad credit. This makes easy profit for the car lot, however results in higher monthly car payments for the consumer. Avoiding dealerships that use this practice is paramount in obtaining a lower interest rate. Regardless of whether or not a customer has prime credit or subprime credit, this practice costs consumers more money than they should have to spend for vehicle financing.

About the Author
Learn about getting a car with bad credit with hassle free auto financing at Obtaining auto finance is simple if you know where to go and what to do.