Applying For A Bad Credit Car Loan – Valley Auto Loans

100% Bad Credit Car Loan Application AcceptanceApplying For A Bad Credit Car Loan

Though there are areas in America where public transportation systems make owning a vehicle unnecessary, the majority of people live in areas where having a car is essential. Due to the high costs related to buying one, however, many end up having to take out a loan. Unfortunately, this can be difficult for those who have bad or no credit. It’s important to note, though, that this doesn’t make it impossible to qualify for a bad credit car loan or vehicle.

Can A Bad Credit Car Loan Really Work?

Applying For A Bad Credit Car Loan

Many people wonder whether or not they can get an auto loan due to their credit rating. Fortunately, there are bad credit car loans made specifically for those who have a poor credit history. These car loans will have higher interest rates and down payments, but they will allow a person to make a purchase as large a vehicle without having to pay full price up front.

An individual who takes out a bad credit car loan will have to make a few more sacrifices than other car purchasers. Sadly, this includes having a smaller selection of vehicles to choose from. Additionally, an individual should put serious consideration into the vehicle that they choose from the pool of vehicles available to them. Choosing a vehicle that requires an abundance of maintenance, for instance, can put an undue burden on an individual who is already having difficulties making payments.

Preparing to Apply for a Loan

There are far too many times when individuals walk into a bad credit car loan department with nothing more than their ID and dreams. For those with amazing credit, this may be enough to get them what they want. Unfortunately, for those who don’t have credit ratings over 800, a bit more preparation will be necessary to obtain a loan.

An individual who is applying for a bad credit car loan will need to prove their ability to make payments on the loan. This can be as simple as bringing in recent pay stubs that prove a certain income level. Bringing in W-2s that prove tenure may also be necessary. There are times, however, when a person has income that isn’t related to employment. If this income includes disability or child support payments, for instance, documents from court or the Social Security Administration will be required.

An Approved Application

Being approved for a bad credit car loan isn’t the end of the process. A person’s income, for instance, isn’t really the amount that they can pay on a loan. This is because everyone has bills such as rent and utilities. A lender will look at all of this information and determine a person’s debt to income ratio. This will allow them to make a practical decision on just how much an individual can afford to pay on a loan.

Depending on an individual’s credit history, the lender will place them into a specific tiered program. The program that a person is placed in will decide the interest rate that they pay, their required down payment and the terms of their contract. All of this information will dictate the type of vehicle that a person can purchase. At this point, all of this information is sent to the vehicle dealer.

The finance manager at an automobile dealership will use the information that they receive from the lender to decide which vehicles meet the requirements set forth by that lender. Newer vehicles will usually result in longer loan repayment periods. Older vehicles will often have higher interest rates based solely on their age. None of this is set in stone, but to change these terms, the individual who applied for the loan will need to make a large down payment.

It’s an unfortunate fact that many individuals have to live with credit that could use some improvement, but luckily, this doesn’t mean that they can’t obtain an auto loan. While a bad credit car loan is a bit more work than a typical loan, it will allow an individual to have transportation to the places they need to go. Without an automobile an individual won’t have the ability to work, go to school or handle their responsibilities; so in fact, a bad credit car loan may help an individual get their head back above water.