If you are looking to buy a car, there are a lot of factors to consider, price and payment among them. Once you have done all of your test drives and have decided on a model and a color the issue of finding the money to pay for that car, especially if you have bad credit, can be even more of a problem.Unfortunately, we live in a world where loans are not as easy to come by as they were only a few short years ago and auto loans are no different. If your credit is bad, it may be necessary to take out two loans to finance the car you need, which can damage your credit even further. That is why it is important to consider your payment options now so that you are prepared once you find the right vehicle.Loan Types and Basic OptionsAuto loans are generally what are considered secured loans since the car that you buy with the money is considered the collateral that you use to borrow it. This alone is a major helping factor for those with bad credit. By their very nature, auto loans are secured and therefore warrant a lower interest rate than unsecured personal loans for those with bad credit.After you establish the type of loan that you can get, the next big factor is down payment. The money that you put down on the car can go a long way in affecting both your interest rate and monthly payments since it means that you ultimately end up borrowing less from the lender. The more money you put down, the better off you will be in terms of rates and repayment.Where to Get These LoansLike many loans these days, auto loans for those with poor credit are best secured online. These days there are many lenders available who will be willing to help you purchase a vehicle despite bad credit. You can try to get a loan at an auto dealership from a traditional lender such as a bank or credit union. However it is important to note that with bad credit this will be much harder. Many brick and mortar lenders tend to have tougher qualifications for poor credit loans.Therefore, looking online is really your best strategy. Generally, to qualify for auto loans you need to have a steady job with a reliable paycheck. Self-employed people cannot qualify. And you also need to be over 18 years of age. You also need to be a UK citizen and have proof of such when filling out your loan application.Bottom Line: You Can Get a LoanThe really hard part about getting an auto loan with bad credit is already solved here: it is possible. The factors that you need to consider now are what you want and what you can afford. After that, you need to do some research on the varieties of online lenders available and then compare the rates and repayment plans that they offer. Through this comparison shopping you, will be in the best position to get the car you want and need at a price that you can afford, bad credit and all.
Subprime Automotive Lending – How Bad Credit Auto Loans Work
Most of active auto loan seekers are people who have been turned down credit by a local car dealer, bank, or credit union. As many people are not aware that there are numerous places to get auto loans besides auto dealers and banks, they usually apply at the bank they have their accounts in or at the dealership where they found a car that they liked. There is no reason to get upset if you have been turned down, as there are lenders out there that would gladly finance people with past credit problems. Many of these lenders offer easy applications, relaxed qualification requirements, and instant approvals.Dealers Are Not Auto Financing ExpertsAutomotive dealers are in business of selling cars, not financing them. Otherwise, they would have been financing their clients themselves without involving auto financing companies and banks. This is exactly why in many cases they would decline your application, as they do not offer all possible financing options. They simply have a so-called finance manager, who works with several lenders or loan brokers to provide added convenience to customers and to make some extra money in form of bonuses and incentives from their loyal lenders.Therefore, if a dealer declines your auto loan application, it does not mean that you are out of options. Many people, who have been declined at one dealer, make multiple trips to other local automotive dealers trying to get approved for an auto loan. It is the biggest mistake a borrower can make. These attempts are useless, as all dealers in the same area use the same brokers and lenders, and harmful, as excessive credit inquiries bring already damaged credit scores further down, creating problems with future borrowing.Seek Bad Credit Auto LendersOnce you know your credit score is not sufficient to obtain traditional financing, it is time to seek alternative options. You may seek bad credit lenders who may get your application approved and grant you auto financing directly, or use the services of brokerage companies. Both of these are widely available online and offer great convenience by offering easy online applications, fast processing, and individual approach, resulting in greater number of bad credit auto loan approvals. The difference between the two is that online brokers have a network of participating bad credit lenders and offer an added convenience of making only one short application to multiple lenders.Why Online Lenders Are Better For Borrowers With Bad CreditMany people question abilities of lending companies to approve and grant bad credit auto loans, as they believe that traditional banks have greater financing abilities. The truth is that online lenders that operate in bad credit market have lower operating costs and therefore are able to issue higher risk loans without incurring extra overall expenses. Such lenders are attracted by extra moneymaking opportunities that subprime lending brings in form of higher interest charges. While the loan terms and rates you may be offered by online lenders may be somewhat higher that banks give good credit borrowers, such give you an opportunity to get a loan that banks refuse to give you and to re-establish your credit by making timely payments on your bad credit auto loan.
Owner Financed Homes – More Common Than Ever
With the recent downturn in the economy, it has become a need for home sellers to find alternative ways to sell there home. Owner financing, also known as seller financing or owner-will-carry is the newest trend in selling homes. The basics of owner financing are simple at the core, the seller essentially acts as a bank for the buyer for a given amount of time.The bonuses are two fold; one the seller opens up the property to a large number of buyers that cannot get conventional financing, typically these are buyers that have credit challenges such as a previous foreclosure or they are paid through self employment. Due to the recent changes in lending guidelines, someone who would easily qualify for a home 3 years ago can no longer qualify even if they have perfect credit.There is a well know article on the internet stating that these types of transactions are rare, and incredibly hard to come by. This article is of course from 2002. These types of transactions are very common as of 2010. In the past, most home owners who would be willing to sell a home on through owner financing would ask for almost 50% or more of the homes value as a down payment. This was to compensate for the fact that they expected the home owners to make payments over a 30 year term. This is just ridiculous by the standards of today.Almost 90% of all owner financing transactions occur now because of investment decisions made in the past by house flippers or people expecting the value on their primary home to increase. This has caused a large amount of homes to come onto the market that are nearly paid off, but are no longer wanted due to taxes on the property or an inability to find a renter. Although money may still be owed on the property, the down payment will more than payoff the underlying mortgage.So what are the terms? This is a question that I get asked on a daily basis from buyers looking to purchase owner finance homes. Of course each home seller is different, but the typical terms are 10% down payment, a 5 year contract with a full payoff expected at the end of the contract and monthly payments on the home amortized over 30 years. Standard practice is to have all payments made through a third party escrow service. The escrow service ensures that all payments are made on the buyers behalf.It’s a shame that there is so much false information about owner financing on the internet. Most of this information is out dated and paints a very bleak picture about the rarity of owner financed homes. The truth is the modern real estate market has changed and most working realtors like myself that have changed with the market are doing just fine. Almost all currently working real estate agents have worked with an owner financed transaction. They are an excellent alternative to buy and sell a home without the need for bank approval.
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