Bad Credit Auto Loans – Find Out How You Can Get a Blank Check Before You Shop For a Car

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.

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.

Considering the Bank Owned Market?

The real estate market is in its second year of decline and there are many buyers who are looking at buying a foreclosed or bank owned home. In fact, there are many bank owned properties on the market right now and it is projected that the number will increase through the summer of 2008.Buying a foreclosed home is not right for everyone and it does not mean that you are going to get a home at a low price. It takes a lot of effort and time to find the right property. I know many investors who pursue properties in the bank owned market who claim they may have to look at up to 30 homes before finding one worth purchasing.So this is not an approach that one should take on lightly. Great deals do not come easily in the bank owned market and one can end up with a property that requires a lot of repair and could cost more in the end. But there are some good buys on the market if you spend the time to find them.There are two main ways of purchasing bank owned homes. The first is in the normal real estate market where properties are offered through real estate agents. The second is through the auction market where the home is sold to the highest bidder.AuctionsThe auction process is the riskier approach to buying a property. I recommend that you only pursue auctions if:1) You know how to properly research a property2) You know about the building or remodeling trades so that you can assess the condition of a home3) You have a lot of time to do proper investigation and you are not ina hurry to move4) You can afford a potential loss of your deposit-sometimes you will win a bid only to later find out the property is not right for youWhy is the auction process riskier? When a property is purchased at auction the buyer does not have a traditional due diligence period to investigate the property. So before you go to the auction you need to so some research on the property. What you are looking for is:
how much is owed on the mortgages
if there are liens against the property
if there are taxes due to the municipalities

An auctioned property is not going to deliver the title to you free and clear of encumbrances. So it is up to you to pay off any liens on the property. This, of course, adds to the total cost of the home.You also may not have much time to inspect the property. In fact, you may not get to see the inside of it at all. So before the auction, try to look at it if you can. Looking at the outside is usually easy, just drive or walk by the property, if it is vacant you may be able to peer in the windows. (I urge you to get permission before going on the property.) What you want to do is get an idea of the condition of the property so you can determine how much it will cost to repair, if repairs are needed. Some things to look at:
the condition of the roof
the condition of the exterior- does it need paint or repairs
the condition of the interior -does it need kitchen or bath updating?
the condition of the heating systems
the condition of the plumbing

These are the major cost items with one exception. If the house is not on a public sewer system then it may have a private septic system. Septic systems can be very expensive to replace and there is no easy way to determine the condition short of having an inspector check it out. It is unlikely that you will have the access or time to perform such an inspection.Real Estate MarketsBanks often attempt to market properties in the normal real estate markets using real estate agents. To find these homes contact a local real estate agent or search through the local Multiple listing services at your favorite real estate web site.Why is this a better way to shop for a bank owned home? First, there will often be more information about the home available. Real estate agents will often do some preliminary information gathering and will make it available to you. Second, you will have the opportunity to look at the house, both inside and out, to check its condition. Third, you will be able to make an offer that has a due diligence period so that you can do proper inspections of the home to uncover defects. This way you know exactly what you are buying. In the event you find a major defect in the home during inspections you have the opportunity to back out of the purchase and get your deposit money back. (make sure this contingency is included in your offer to purchase)Buyers who want a bank owned property but may not have the skill to properly investigate on their own, this is a great approach. If you do find a bank owned home you love and decide to make an offer, be prepared to wait for a response to your offer. Banks are not very responsive. It could take 1 week or more for a decision on your offer and 4 weeks is not uncommon.