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Qualifying for the absolute best sub prime auto loan depends on several factors regarding your finances and credit history. A borrower with good credit history may not find it very difficult to qualify for a poor credit car loan with the best rates, however, the picture can be completely different for those with a poor credit rating. All sources of income and expense are reviewed thoroughly by the lending companies to decide whether or not the applicant has budgeted correctly up until this point in order to receive this particular auto loan. Income left after taking care of all expenses is considered to be the most important qualifying factor for bad credit consumers. At Valley Auto Loans, we have been working with poor credit car loan shoppers for a long time and our service has helped many of our customers qualify for low interest rate auto loans despite their bad credit.
Every bad credit borrower should start budgeting on their own before sending their auto loan application. The very first step is the determination of DTI or the Debt to Income ratio. To find this simply calculate your monthly expense by adding up all recurring monthly bills like utility payments, other loans, credit cards, rent and mortgage, etc. The monthly debt percentage can be determined by adding this cumulative figure by the gross monthly income. Most of the non-prime auto loan lenders have a monthly debt cap at 50% of the monthly gross income of the person, including mortgage payments. Similarly, all auto lenders prefer the car payment to be less than 15% of the monthly gross earning of the applicant. Therefore, with proper budgeting, every bad credit auto loan applicant can find out the car payment limit, giving them the current amount to which they can qualify.
During this computation process for the vehicle budget, it is important to include gas expenses and maintenance costs. Applicants who are considering the purchase of a used car without a warranty must plan for a separate budget for repairing and unforeseen maintenance expenses. However, it is possible to avoid these expenses by purchasing a service contract with your vehicle.
Auto Loan Budgeting
It is possible to understand the way auto loan applications are reviewed by the lending companies if you know how to calculate the PTI and DTI ratios. As a result, one can check his/her own qualification chances before sending the application.
Valley Auto Loans can also be your destination for hassle free auto loan service that provides approval to applicants. Our exclusive service has helped many credit challenged auto loan applicants receive auto loans of their choice. Apply today through our auto loan application and find out how easy it is to qualify for a bad credit auto loan.
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