Feed: How To Find The Best Car Loan For Bad Credit - AggScore: 14.0

Copyright (c) 2010 Liz Roberts

A bad credit history makes it difficult for a person to get approved for a car loan. The main reason is because of the high risk involved on the part of the lender. However, there are lots of companies nowadays offering bad credit auto loans. Another challenge arises. You will definitely find offers that are too good to be true and if you don't have an idea on how and where to look for the best deal, you can get stuck in a bad deal.

In this article, let's discuss important pointers that you should know before signing up that bad credit car loan application.

Seek the right help. There are legitimate lending companies that offer reasonable car loan deals for customers with bad credit. You need to be a hundred percent sure that you are dealing with a trusted lender. Otherwise, you could be charged with hidden costs and expensive rates right after you sign up your contract.

Compare offers. Upon doing your search, you will discover that different lenders offer varying rates and fees. Obviously, the only way to pick out the best choice is to do comparisons. Use the internet to gather car loan quotes. You can also find broker websites in online that allow you to compare up to three or more lenders at a time.

Investigate further. Once you are done gathering quotes, the next thing to do is do further investigation. Get to know the Terms and Conditions of the lender. How is the interest rate calculated? Is it a fixed rate or a variable rate?

Take note that a variable-rate loan may start out very low but the initial rate can change or increase at any time within your repayment period. Although a fixed-rate loan may start out with a higher interest, you can be confident that your monthly fees will not change throughout your loan's term.

Choose a lender that offers credit reporting. You can improve your credit score by using your bad credit car loan. However, not all lending companies provide credit reporting service. Before submitting your loan application, check if the terms include reporting your payments to the major credit bureaus.

Get pre-approved. Before you scout for the car you plan to purchase, it is wise to get a pre-approval first from a potential lender. This will help you know the exact amount of loan you can get and it would mean less time wasted looking for cars that are way out of your budget.

Consider your repayment obligations. If you can afford to wait until your credit history improves, then you will be in a much better position to negotiate with lenders. However, if you really need to get a car at this time, then go ahead and apply for a bad credit loan.

One last piece of advice is to seriously consider your repayment obligations. Even if you can get approved for a much higher loan, it is still important to make sure that you can be consistent with the monthly payments. Otherwise, if you fail to make payments on time, you will be penalized with more fees and you will be doing more damage to your credit history.

Since 1989, New Horizon Business Services, Inc NHBS, Inc has been providing consumers and business owners with financing. Join our mailing list for Free Tips on Rebuilding and Repairing Credit. Click here for the list of bad credit car loans that suit your needs.

What is the best/easiest way to refinance my car loan?

I have already contacted the company who loaned me the money in the first place they say that my income is insufficient and that my debt to income ratio is too high. The crazy part is that I earned less money and had more debt when I first bought the car!!! So what's the deal? Did the crooked salesman pull a fast one on the lender or what? Why can't I refinance now? What lender should I try next?

Answer
Oh how I love this. The "crooked salesman pulled a fast one." Why? because the economy took a downturn, and lenders tightened their loan requirements? Have you not paid attention to the news? You sure didnt care if there was a "fast one" involved when you got that car you wanted so badly. There is a huge credit crunch right now. Lenders have really tightened up on what they will lend, and to whom. Where a 700 score was a slam dunk a year ago, its not so much right now. I am seeing people who would have just signed and driven away last year get turned down today. Add to that, cars depreciate. I am sure you owe more on the car than it is worth - most of us who financed do. If the bank you are currently financed through will not rewrite the loan, then its doubtful anyone else will either. They know your car payment history best, and they aren't willing to redo this. So its unlikely another lender will either. And stop blaming that sneaky old car salesman for a contract you willingly signed. It takes two parties to make a deal.