Much like the bad or low credit score home loan market, the bad credit car loan market is a packed and competitive arena. If you find yourself in the position of needing a bad credit auto loan use discretion in selecting your lender. While most lenders working in the bad credit car loan sector are straightforward, there are those who skirt the law with predatory loan practices. Knowledge is the best protection against these shady loan officers. Know more about your own credit than the lenders do. Arm yourself with a current credit report and FICO score.
There are free services available online if you look around a little. If a lender says he or she has different information about your credit than you do, ask him for their sources. Most of the time they will have the same information that you have. But if for some reason they have something crazy thing listed on their copy of your credit report that doesn’t sound like anything you know about, maybe you should ask to see their report of your credit. It is very possible they entered your social security number incorrectly. A simple keystroke error could possibly lead you to have a high-interest rate on your car loan. So, make sure the info they have matches up with what you have.
Don’t just show up to a car dealership and have a salesperson show you around. If you want to look at the cars on a dealerships lot. Go on the day of the week when they are closed. Many states follow a law called “blue-law prohibitions” in which automobiles may not be purchased or traded on a Sunday. So, go to a car dealership and look around at the cars on the lot on a Sunday when no salespeople are around to bug or hassle you. Take your time looking at the different models, colors, prices, and features without some pushy salesperson trying to close a deal so they can get paid their commission. After you have spent a decent amount of time looking at the available cars that are out there.
Go home and research the price of that car to make sure dealerships isn’t trying to rip you off. Research the value of the different models. For example, you might like a 2-year-old Honda Civic 2 door that has 24,000 miles on it and it is offered for $14,000 however the car next to it is a 3-year-old Honda Civic with 2 doors but has 36,000 miles on it and is offered for $12,500. Why the difference of $1500 in price? The second one has 12,000 more miles on it. At that point, you need to ask yourself if all things being kind of equal on these two cars, which is the better car to buy? The more expensive one has fewer miles on it. The other one is less expensive, so the monthly car payment will be less. Also, the old car will possibly be less expensive to insure, and register. However, an old car will have maintenance coming up sooner than the new car. These are all things to consider.
The actual price of the car being financed with a bad credit loan shouldn’t be any higher than the same car for a good credit loan. So make sure the dealership doesn’t try and lie to you and tell you some story. After all, if a person left a courthouse after filing bankruptcy and stopped into a 99 cents store. Everything would still be 99 cents to them, right? The store wouldn’t say to them “Oh I’m sorry because you just filed bankruptcy, so everything here is going to cost you $1.10 ok? You can become trapped in a loan and be what is known as being “upside down on a loan” you pay way more for a car then the car is that it is worth. For example, you buy that $14,000 Honda Civic mentioned above.
But the salesperson is shady and slides in about $800 in garbage fees on your loan. Then adds another $1000 to the price of your car. Next thing you know your $14,000 Honda Civic is now $15,800! If the car were worth $14,000 and you owe now $15,800 on the loan you’re “upside down” on your car. This isn’t all that uncommon when first buying a car. But if after around a year of payments you’re still upside down you might have been taken for a ride from your salesperson. A way to make sure you’re not getting screwed over or ripped off by the lenders is to shop around. Just as you will shop for your car, shop for your lender. But who has time to drive over to a bank or lender? Fill out their application. Wait around for them to run your credit. Then tell you “I’m sorry but we don’t lend to a credit score as low as yours” and you walk out feeling like a total loser and go to the next bank for more rejection. That sounds like it really sucks.
A much simpler way to apply to multiple lenders all at once is applying online at justgetmeapproved.com when you fill out their quick online application all your information is securely sent into the network of lenders they work with. That way your credit is pulled just one time, but all the lenders will be able to see what your situation is. Some of the lenders in the network only work with the best borrowers known as “prime rate borrowers”. Those are the people with high FICO scores, but the lenders don’t really make a lot of money on those loans because the interest rates are so low. While other lenders concentrate on borrowers with bad credit scores because bad credit score borrowers don’t have as many lenders willing to lend to them because of the risk they won’t pay back their loan. These borrowers will pay a higher interest rate for their loan. However, one nice part about when you apply with justgetmeapproved.com is the lenders in their network are aware they are not the only bad credit lender seeing these borrowers.
This means they can’t offer a borrower so insanely high-interest rate because another lender will more than likely underbid them and get the loan. Having competition among lenders only helps keep interest rates lower for borrowers, which in turn keeps a person’s car payment lower so they can live a nice life. If you want the network of lenders that justgetmeapproved.com works with working for you all you need to do is apply here. Then wait for the lenders to call you. No longer having to drive around applying to every lender near you. Doesn’t that sound like a MUCH better idea?