Auto Bad Credit shows those with bad credit how to obtain a 100% guaranteed approval for a car or truck loan.
Listed below are many tips and questions that will assist you in choosing the right lender that will give you a fair deal while rebuilding your credit. I want to take a minute to review how most of the sub-prime auto lenders operate..
Your more reputable bad credit lenders are usually a subsidiary of a major prime market lender.. Like many companies the larger banks will distribute their risk.
Prime market lenders usually allow for a percentage of high risk loans. While this may be through a sister company the loan becomes a write off if it goes bad..
With that said there are also many bad credit loan companies who are second rate lenders, do not have the backing of a major lender and cover their risk by taking advantage of those with bad credit.
Your major lenders can distribute their risk and charge higher interest rates. There are of course many reputable lenders who will give you fair deal. The others will try to overcharge you on the vehicle you choose..
Many sub-prime lenders either own or partner with dealers where you are able to buy your vehicle. While this is fine it is not okay if the dealer limits your selection to specific vehicles. The question becomes why do lenders do this..
Since your less powerful lenders have no backing they now cover their risk in other ways that can hurt you. Vehicles that do not hold their value are less of a risk and offer the lender the opportunity to overcharge for the vehicle.
If you see this run. The tough times you have had do not dictate being taken advantage of and with a little research you won’t..
Here are some of the most common questions we receive:
Do sub-prime lenders require a down payment?
Most of your sub-prime auto lenders will allow zero down financing. There are some who will require a percentage of the vehicle as down money. .
Does a sub-prime loan affect my chances of getting prime rates in the future?
This simply put is a myth as the opposite would be true..
Unfortunately choices are limited with bad credit. Of course you can go to a buy here pay here place but talk about rip offs or you can work with a legit sub-prime lender. As long as you deal with the right lender they will report your timely monthly payments to the credit agencies which will go a long way to repair bad credit.
* Will I pay higher interest rates?
Yes. While you will pay higher interest rates with bad credit, your next loan should be at prime interest rates with timely payments..
The object is to get the vehicle you want and timely payments will give you a very good chance of getting back to prime rates with your next loan..
* Which are the strongest and more reputable lenders?
This is the most important question as not choosing the right lender will significantly increase your cost and not help you to rebuild your credit.
You can visit Auto Bad Credit who has a complete list of reputable lenders who offer zero down 100% approval for all credit.