Car Loan Market for Consumers with Bad Credit is Booming

Car loans offer lenders a big ticket item with limited risk. While a lender’s risks their entire investment on an unsecured personal loan a car loan represents less risk since the lender can take possession of the car if the loan is defaulted. Divorce often leads to bankruptcy and will impact on a consumer’s credit score long after they have recovered financially. Specialized lenders have recognized that a poor credit score may not reflect on a consumer ability to make payments and have placed less emphasis on credit history and more emphasis on ability to pay.

National and regional lenders have emerged to service the very competitive bad credit car loan market referred to as the “Special Finance” or “Sub-prime” market. These lenders have further divided the “Special Finance” market up into different levels of risks to such an extent that there are lender’s who has specifically targeted the most credit challenged consumer with the highest risk.

The good new is that no matter what your credit circumstances are, there is probably a lender out there for you.

Another phenomenon is the independent credit service that will process your request for credit and forward it to the lender that is most likely to approve the request. These services usually work with a car dealer who have access to both National and Regional lenders.

The Online Credit Application

The independent credit service has successfully introduced the online credit application to the market. The online credit application offers a no hassle approach to applying for credit. Anyone who has sat in front of a loans officer and had to explain their credit history will find the online credit application a blessing. If you decide to complete an online credit application make sure that it is secure. Look for a security certificate. Comodo and Verisign are two companies that offer security certificates that I am familiar with. You should also look for a privacy policy to guarantee that your personal information will not be shared or sold.

A car loan is a big ticket item that can help rebuild your credit score. Some lenders will offer programs that will reduce your rate or allow you to renegotiate after a specified length of time if you have not missed or been late on a payment.

There are many lenders who specialize in products and services for consumers that have troubled financial histories including bankruptcy. An independent service will provide an online credit application and will give you access to network of lenders. Simply enter “car loans” in search box of your favorite search engine. Most of these service offer tools like loan and budget calculators.

What You Can Do

The first step before shopping for a car loan is to evaluate your financial situation. By determining your income to debt ratio you can see what kind of monthly payment is feasible for you. You do not want to be overburdened by payments and find yourself in trouble again. Next you may want to check your credit rating and clean it up where possible. Your credit score is negatively affected by late payments, high debt to income ratio and past bankruptcy. Close any accounts that are not in use. Too many open accounts are a negative. Pay up any outstanding debts. If you have recently filed for bankruptcy and there are extenuating circumstances such as a lay off or divorce, consider writing a page of explanation to attach to your report.

Regardless of your past credit history there is almost always a lender who is willing to provide you with a car loan. The question is how much are you willing to pay for that loan? A few extra percentage points are worth the opportunity to rebuild your credit. But be sure that your financial house is in order before you apply so that you can qualify for the best rate and terms your current financial circumstance will allow.


Article Source: ezinearticles.com

Buy Any Car You Desire With Bad Credit Car Loan

Getting a car loan with bad credit isn’t as painful as many people imagine. Bad credit car loans are quite common these days among majority people as they are credit-challenged. Bad credit history weakens the plans of many people who want to purchase cars. If you are having a bad credit history, you will be facing problem of getting the car you're interested in. Statistics have shown that nearly 25 percent of all car buyers are not eligible for standard financing options. If you are having an imperfect credit history, obtaining finance for a new car can be troublesome. But still, through the proceeds of bad credit car loan, borrowers can buy any car that they desire.

A bad credit car loan can be your best option to amend your credit standing and get into a new car. The loan process for bad credit car loan is akin to any other loan. All you have to do is fill in a simple online application form with few of your details. Before applying for one of these bad credit car loans there are a couple things you can do to ensure that the process goes smoothly for this specialized area of car finance:

* Review your Credit History
* Determine How Much You Want to Pay
* Prepare Documentation
* Keep a Clean Credit History

Bad credit car loan deals are usually associated with higher interest rates because most of the time lenders are concerned about the safety of their investments. If you get a bad credit car loan straight from the dealer, you could end up limiting your car buying options. Dealer financing will also leave you burdened with high interest rates.

Those who do not have a credit history at all can use bad credit car loan from consumer car loan to enable car purchase. A good car loan calculator will let you figure out what is the best type of loan to get. You can always get financing when buying a car, but depending on your credit score, you may end up paying high interest. When you need to get a new car or simply want a new one and have bad credit, you have to figure out what your options are for getting on the road. Your chances for loans can help immensely in the search of bad credit car loans. Before talking to the lenders, know your bad credit car loan options:

* Reasonable interest rates
* Both secured and unsecured bad credit loan options
* Any bad credit condition or credit score
* Applicable to both used and new cars
* Free bad credit car loan advice
* Loan to suit your budget

By getting a bad credit car loan online, you have a better chance of getting a reasonable rate. This is because the online market is so aggressive. There are enough of companies who are all competing for your business. They are willing to offer you low rates, moderate terms, and minimal lending fees. And, best yet, they won’t think twice about your bad credit. The biggest advantage to shopping online for a bad credit car loan is:

* Convenience
* Free rate quote from one or more lenders
* Simple application to fill up
* Fast response from lenders
* Comparisons can be done to get the best credit car loan

It is believed that despite considering bad credit as a huge obstacle to getting car loans, there are options still available for getting bad credit car loans; it just takes extra search and legwork.

Article Source: ezinearticles.com