Bad Credit Auto Financing
Not every lender has the proper resources to provide car buyers with bad credit auto financing. The majority of people with bad credit do not suddenly decide one day to quit paying their bills and live a bad credit lifestyle. It is usually the result of a lost job, sickness, injury or other circumstances when people fall into the bad credit category. After the circumstances that caused the problem are resolved, people may find it difficult to get a loan.
Bad credit auto financing makes it possible for people to re-establish a good credit rating and obtain a dependable vehicle at the same time. Most traditional lenders hesitate to extend a loan to someone with bad or no credit. They simply refuse to take the risk. Businesses that are devoted to extending credit to people considered high risk are willing to give citizens a second chance.
Keep in mind that all financers are in the business to make money. People with bad credit do not typically qualify for those frequently advertised low interest rates. Those are reserved for people with the best credit scores. The fact is bad credit normally results in higher interest rates. As scores increase interest rates go down.
Requirements for Obtaining an Auto Loan with Bad Credit
The good news is that because there are lenders willing to give people another chance, a good credit rating is in the hands of the borrower. If individuals taking out a bad credit loan to purchase a dependable automobile make their payments on time, they are rebuilding good credit. Lenders specializing in auto financing loans for people with bad credit usually have a few requirements people must meet.
- Earns a minimum monthly income of $700
- Has reached the age if 18 or older
- Maintains legal citizenship of Canada or the United States
- Has held a job consistently for at least a year
Applying for Automobile Financing with Bad Credit
At one time, people with bad credit could only buy the cheapest autos on the lot but that is no longer the case. Bad credit loans are often large enough to purchase a late model dependable vehicle. People seeking to apply for an auto loan with bad credit will find the process simple starting with filling out the application. A qualifying borrower can choose a vehicle from an authorized dealer within the specified loan amount. People then meet with an auto loan adviser to finish details, sign the paperwork and become the owner of a new or used automobile.