Author: Dale Rogers
Article:
Achieving a bad credit auto loan isn't hard to do with the
proper requirements and documents for the lenders pending the
approval. There are a variety of sources and ways to finance a
car. There are several factors that influence a lenders decision
to give a bad credit auto loan. Such factors include money down,
debt to income ratios, work history, and of course the most
important; one's credit score. Lenders have special financing
options for those with bad credit; they usually look for some
type of collateral, such as money down, or a trade in (car
that's paid off, or has positive equity). The amount of money
down that you put towards your auto loan is extremely important
this may determine your approval for the loan. Ultimately, the
more money down the less the risk for the bank, the lower the
interest rate, and greater chance of approval. Special financing
options are usually to the benefit of the consumer, which is why
it's offered. This is an opportunity to rebuild ones bad credit
and prove themselves credit worthiness to the banks, and
lenders. Of course with bad credit, it typically ends up costing
you more than the vehicles actual value. Unfortunately, that's
part of a bad credit auto loan, or any other type of loan,
mortgage, credit card, etc. But in the end it's up to you to
rebuild, and reestablish your own credit, which will ultimately
benefit you in the long run. Debt to income ratio is another
important factor lenders use to determine your credit
worthiness. A lower debt to income ratio is always preferred,
along with a decent credit standing. A low debt ratio indicates
your ability to handle more debt, enabling you to get better
interest rates, meaning more opportunities from different banks.
In some cases this may allow you to provide less money down or
collateral. Although it's in your best interest to have more
collateral if possible, with a low debt to income to get the
lowest rates to essentially save more money. Time on the job is
an essential part of getting an approval with the banks, not
only does it help your credibility, it may determine the final
approval. The longer one has been on the job, the more it
benefits, along with income being a variable. This gives
credibility to the individual, giving less risk to the bank.
Someone with a two-year job history is most likely to get an
approval than someone who's been working less than a year. It
shows stability to the lender, proving stable income, and the
ability to pay the car. The lender doesn't want to see this car
get repossessed, the less the risk, the more opportunities for
an approval. This should also be verifiable income, the bank may
ask you to provide your most recent paycheck stubs for final
approval along with proof of residence. Bad credit financing
isn't as hard as most people make it to be. Getting an auto loan
with a FICO score less than 620 is easy to achieve, even if
you've had a bankruptcy! The amount of money down is a huge
factor along with credit; its always a possibility to get an
auto loan. Whether it may be the help of a friend, or relative
co-signing, putting large down payment, or even your work
history, it can be done with bad credit or even no credit. In
the end you will have a car, along with reestablished credit,
increasing your FICO score, enabling you to get much better
rates in the near future, proving your credit worthiness!
Dale Rogers http://www.brokencredit.com
About the author:
Dale Rogers provides valuable information to the Broken Credit
Blog. He's an expert on bad credit, no credit loans, helping
people achieve their dream of buying a new car or home. The
Broken Credit Blog is a free site created to assist the public
with information on credit repair, responsible lending.
www.BrokenCredit.com
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