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Getting an Auto Loan with a Low Credit Score

by Jason Lanier
When purchasing a vehicle, troubled credit presents a challenge for many people that have had a hard time getting approved at local dealerships.

Those that are not aware of online finance opportunities through reputable lending networks, typically buy vehicles at inflated interest rates. poor credit are turned down locally due to the lendng guidelines of local banks, credit unions and dealer lenders that have strict lending guidelines~It’s common that people with low credit scores are refused car credit locally. This is because of the strict lending guidelines of local lending organizations}.(continued below)

Getting an Auto Loan with a Low Credit Score

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Online Financing -
There are good lenders online that are willing to help people buy a car with bad credit. This can be a better option than trying to get financing locally. Car loans are secure loans and are easier to obtain with troubled credit than credit cards and other unsecured lines of credit. Being able to get online and arranging online finance is a great way for people to locate lenders that can help them.

Overcoming Poor Credit -
Credit 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 monthly income, length of employment 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.

Avoiding Predatory Loan Offers -
There are more bad credit 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 many times, people with poor credit scores fall into the trap of predatory lending practices, further escalating their already suffering financial condition. 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 trap of high interest rates and fees.

Little to No Down Payment Car Loans -
Many people that have negative 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 down payment is simply a matter of having the right combination of car, price, loan value and financing terms. It’s really very easy and good lending sources and included dealer networks can help you with this.

Avoid In-House Financing -
The most expensive way to purchase a car, truck, van or SUV is by buying at buy here pay here dealers. Dealerships that finance their own cars charge very high interest rates and always require down payments. 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 a Buy Here, Pay Here car lot is needed, is when you are in a current bankruptcy. Even so, it can cost less to rent a car, than to buy from a dealership that offers in-house financing.

Getting a Lower Interest Rate -
Some car lots, 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 produces a fast and easy profit for the dealership, however costs the consumer with higher car payments and interest rates. 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 auto finance.

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