Utilizing In-House Auto Financing For Bad Credit
If you are looking to make an automobile purchase, having enough cash to complete the transaction is essential. Maybe you were turned down for traditional auto-financing though a lender or private banking institution. If so, you may want to consider in-house automotive financing. In-house auto financing is set up like a private lending institution, giving you the option to purchase a vehicle and get into a reasonable payment plan.
There are several advantages to in-house financing. Some of the perks include:
- Convenient weekly and bi-weekly payment options
- Cash Payments
- No Credit Checks
- Affordable Vehicle Availability
Most automotive lenders and banks base all of their credit application decisions off of a person's credit score. A high credit score over 750 is often required for most lenders to considering loaning you money to purchase a vehicle. The higher your score is, the lower your interest rate will be and ultimately the lower your monthly payment will be. If you have paid your loans late in the past, defaulted on a loan or credit card as well as carry a high amount of debt compared to your overall income, your credit score will be affected negatively. This will make it difficult if not impossible to get a credit approval through your bank.
Seeking an auto dealer who also specializes in in-house financing will allow you to get the vehicle you want while building your credit at the same time. Because you are considered high-risk, you may be required to place a down payment on your vehicle loan to get approval. This will serve as a form of collateral, in case your default on your auto loan.
There are several ways you can make your automotive purchase a success and build your credit at the same time:
- Place a substantial down payment on your loan- This will not only look good to the lender but will also help you pay your vehicle off faster. While it may not reduce your monthly payments, you will have fewer payments because the term of your loan will be shorter.
- Repair your car as needed- Make sure to get routine maintenance done on your vehicle so it will last the life of the loan. This will keep the value of the vehicle up, so you will get more money out of it should you decide to trade it in or sell it.
- Make all payments on time- Don't be late on your payments. If for some reason you are going to be late on your payment, call your lender immediately and ask for help.
In-house financing is a viable option for people with a struggling credit history. Getting the car you need at an affordable price is the greatest benefit and advantage, so talk to your lender today about the best financing option available for you.