If you have bad credit but need to buy a car you should consider getting pre-approved before you shop. Doing so will save time and money. Plus, you can spend your time trying to get the best price rather than worrying about financing your car.Why You Should Get Pre-approved Before You Shop For You CarI can you tell you from personal experience that getting a lender to give you check before you buy a car is the better way to go. Here is an example of what can happen if you don’t get pre-approved. I went to an auto dealer without a pre-approval, blank check nor good credit. So when I informed the car salesmen of unfortunate situation he had me apply for a loan through his finance company. Well low and behold they approved me for a loan but at 18%! Granted they didn’t ask for a large down payment, which is common when you try to buy a car while having bad credit but they financed a car that put me upside down. In other words, they give me a loan in which the payoff was more that the car if worth. Way more. I did end up paying the car off in full but let me tell you it was quite painful to do so.The flip side to this story is I did get a auto loan company to approve me upfront and provide me with a blank check for me to buy my next car. Having that blank check put me and a much better position to buy because my loan terms where much more favorable and I was in a better position to negotiate a better price the car. You can expect the same treatment if you walk into a dealer with a blank check. As the saying goes “Money Talks BS Walks”.Start By Finding A Good Bad Credit Auto Lender.There are plenty of auto loan companies that will finance people with good and bad credit. A quick Google search will reveal a plenty to choose from. This is a good thing because you can compare loan offers from the auto finance companies that interest you. Be sure to look for the loan interest rate. The interest rate will tend to be higher for those with bad credit and lower for people with good credit so keep that in mind. Also check the APR or Annual Percentage Rate. This rate is very important because it will tell you how much you will pay out once you pay off your loan. This is how I determined that I was upside down on my first auto loan. Beware to the it is common practice for sub prime auto lender the give you a loan that will cost more the car is worth. Also be sure to check out any other fees included in the loan.Use the Internet To Get Multiple Auto Loan OffersMany if not all car financing companies have online applications that make applying for a auto loan a snap. There are even online companies that will take you online application and produce offers from several auto loan companies for you to choose from. As a result, it is quite possible to receive an pre-approval or even a blank check in less than a week.In closing, I just want to point out that even thought the economy is moving at a snail’s pace, this is the best time to buy a car even with bad credit. Many car companies are struggling to be profitable so they are doing whatever they can to get people in cars. Also, auto loan companies are following suite to get more people approved. So if you are thinking of buying a car but you think you credit isn’t good enough, think again. Chances are you can get financed for a car. Just make sure you get that blank check first.
Bad Credit Auto Loans – Find Out How You Can Get a Blank Check Before You Shop For a Car
What Assets Can You Pledge for Secured Auto Loans?
Secured auto loans like all secured loans require the borrower to pledge an asset as security and insurance that the money will be paid back. It is possible to acquire loans that are unsecured but these will be more expensive. The secured option involves the borrower providing the creditor with some form of collateral. If the borrower defaults on the repayments then the lender can seize the pledged security and resell it in order to recover their money. Sometimes the asset that is plighted in secured auto loans is the auto itself. If the repayments are not met on time and in full, the auto concerned can be taken back.You will usually need a good credit rating to qualify and be accepted for secured auto loans. These types of loans are useful if you want to borrow large amounts. Your asset is also often your home so you should always treat repayments for your loan as especially important. If secured auto loans are acquired with property as the asset, then it is vital to keep up with the repayments. This asset option can seem like a big commitment but it can ensure you pay the lowest rates of interest possible on your loan for an auto.There are other things you can offer as assurance to the lender such as any savings accounts, bonds, stocks, shares or any other valuables. Whatever asset you pledge will be used as reassurance to the loan granter. Secured auto loans are a good method to use if you have such collateral available and are sure you can easily make the repayments. By supplying sufficient security, the lender is able to offer you an excellent rate as you have instantly lowered your risk potential.Property does not have the same depreciation rate as new autos so the lender has the best security they can possibly ask for. Secured auto loans are a lot more favorable in cost and terms to both lenders and borrowers alike. The borrower benefits from the best interest rates for their auto loan and the lender benefits from the best levels of security. If you have assets to put forward as protection, then even with a less than perfect credit history you will be considered for an auto loan of this kind.The particular assets that you pledge when applying for secured auto loans will give the creditor a substantial guarantee that they can recover losses in the event of defaults. The borrower is much less likely to default on the payments if their property or other valuables may be at risk. Loans of this type require very careful consideration when pledging assurances and therefore, you should always study the small print of the full terms and conditions. Those with poor credit may be unable to apply for an unsecured loan but if they have some collateral, then applications for secured auto loans are welcome. Lenders are aware that good credit status is not that important if you are able to pledge a valuable asset instead.