When I am looking to exert control over the process involved in car loans for bad credit or purchasing a used or secondhand vehicle from a dealership, I often tend to look towards the use of a blank check auto loan.
The reason I opt to go this route is that I have come to find out that these loans often grant me an alternative auto financing method.
What am I talking about here?
By using the blank check auto loan, it means that my financing will go through a third intermediary.
This way, I do not have to worry about directly dealing with a dealership that will determine how much am supposed to pay and at what rates.
The fact that I get to know the interest rates before stepping into a dealership is a plus for me.
Blank Check Auto Loans: What Are They?
These are loans that a prospective car buyer like me obtains from a third-party lender or financiers like banks before actually visiting the car dealership.
When the financier pre-approves a loan that I am to use in acquiring a car, the amount that has been pre-approved is referred to as a blank check auto loan.
Once a financier has pre-approved the loan, it means that I can get to use this loan; in the same manner, I would use a check when at a dealership. What this essentially means is that as a buyer, I do not have to worry about seeking assistance from the dealership.
Additionally, I no longer need to worry about coming up with a down payment.
Even though there are instances where the total loan value could end up exceeding the automobile's worth, I have come to note that it is a popular car refinancing option as many dealerships often tend to hike the interest rates on the financing options offered to clients like me.
In other cases, a dealership may choose to take advantage of the fact that I have bad credit which means that my options are in fact quite limited.
However, I am now able to avoid all this by ensuring that I get myself this type of loan from an auto loan financier before I start shopping around.
At this juncture, I should point out that it is not possible to use this kind of loan to acquire a vehicle for recreational use, a motorcycle or a commercial vehicle.
In addition, the car that I am allowed to buy should not have more than 70,000 miles on its odometer or be older than 7 years old.
The lending criteria will, however, vary from one lender to the other. The lenders I have come across often tend to put in place different criteria for determining my actual credit merit.
To smoothen this process, I have resorted to making sure that I have obtained a copy of my credit report weeks in advance.
This will provide me with enough time to rectify any negative entries that may have made its way into the report.
Correcting the adverse entries before I start the process will make things easier for me as I will have improved my general creditworthiness.
What Do Experts Think About the Blank Check Auto Loans?
When I was shopping for my very first vehicle, the experts I approached for advice recommended that I consider other financing options as opposed to relying on a dealership.
I was told that it was in my best interests to seek financing from a credit union, bank or another third-party lender when it came to dealing with used vehicles.
I was told the reason for this was because a lender who was well-versed with my past finance history would be able to offer me a loan that had an attractive interest rate.
I came to learn that these claims were indeed true regardless of the credit situation that I was facing at that particular moment.
For instance, when I had a good credit standing, I could easily negotiate with the lender for better interest rates.
And when I was faced with a bad credit score, which meant that I had additional risk factors, the lender would still offer better alternatives as opposed to what I would be offered at the local leadership.
Additionally, my research has proven that third-party lenders, car refinancing lenders and banks often provide better pointers on how I can go about repairing my damaged credit score.
Repairing it also means that I now have an opportunity to enjoy reduced interest rates when shopping for auto loans or lease.
Blank Check Car Loans Advantages
Getting a blank check car loan is advantageous in a number of ways:
- Ensures That I Will Purchase a Vehicle That Will Easily Fit into My BudgetWith this kind of loan, it means that I never have to worry about blowing my budget. This is because, whichever car I choose to buy, I know that it is a car that will easily fit into my monthly budget. It also means that I will be in a position to sustain it for the duration of this loan.
- Prevents Me from Getting into Costly Financing Offered by DealershipsThe blank check loan offered to me by ValleyAutoLoan.com means that I do not have to worry about the hassles that come with getting a costly loan from the dealership. Past experience has taught me that dealerships are always looking out for their bottom line. This means that the dealership will likely take advantage of the fact that I have a bad credit profile when providing me with a car refinancing offer.
- A Chance to Work with Lenders Who Have a Good ReputationWhenever I choose to use an online process, it means that I have more benefits to enjoy as I will get an opportunity to work with lenders who are highly reputable and who have already been tried and tested. In addition, it also means that I have a number of options to explore.
The Dark Side of Blank Check Car Loans
- No Education Is ProvidedOne serious danger that comes into mind when I am dealing with these loans is that there are situations where the lender fails to provide me with enough information. For instance, I have come across lenders who only provide me with a blank check auto loan online without educating me on all my responsibilities. Even though this type of loan comes with a fixed interest rate which means that I am protected despite the market conditions, I still think that the lender should furnish me with more information on the rates. It is important that I do not approach the loan as a financial responsibility that I need to pay back on the agreed installments.
- It May Not Be in My Best InterestsAnother dark side of this type of financing is that it can easily sink me if I have bad credit. Some lenders will only consider my request after it is established I have a decent credit profile. This means that poor credit could increase my chances of being denied car refinancing which will force me back to square one.
How Do I Find a Blank Check Auto Loan That Has the Lowest Rates Possible?
Many lenders and banks today prefer that I get my financing done away with before I approach any dealership. It is the reason why the financiers have simplified the application process for these loans.
Pre-arranged Financing Options
History has taught me that when my credit score is stellar, it becomes easier for me to find a blank check auto loan. In some cases, the lenders will actually email me some car refinancing offers.
In this case, all I will need to do is determine the financier that I would like to use.
Websites like ValleyAutoLoan.com have made it easy for people like me to get good rates on blank check auto loans. All I need to do is to fill in an application and submit the form.
On receipt, the lender checks my credit and then gets back to me with the best rates possible within a matter of hours.
Pre-arranged Financing Considerations
Before I start shopping for an auto loan, I always make it a point to consider a few essential factors related to my personal finances, e.g., my current monthly obligations and my current personal finances.
This is because, regardless of whether I have good or bad credit, the lender will want to know whether I am in a position to repay the loan when it is due.
How Do I Qualify for a Blank Check Auto Loan When I Have a Bad Credit?
The internet is my go-to resource when I am shopping for a lender. But before I start shopping, there are a few things that I always like to consider first:
- Learning My Credit ScoreI always start by obtaining my credit report from one of the three national credit reporting agencies, i.e., TransUnion, Equifax, and Experian. With my credit report in hand, I can now get a better idea of what to expect.
- Fix It: This means that I need to use the information in the report to correct any inaccuracies that may be present. Fixing existing issues will help me raise my credit profile.
- Get Pre-approved: Pre-approval always helps me reduce stress. This helps me know the amount that I will be dealing with when approaching a dealership. It also assists me to get rid of the anxiety and stress that often comes about from dealing with the high-pressure tactics applied by the salespeople.
Requirements for a Blank Check Auto Loan
The requirements for this type of loan are very similar to those used when applying for any car loan.
One such requirement is that the car being considered must be worth more than $7,500. In addition, many financiers will explicitly state that I need to purchase a car from a recognized dealership.
This means that I cannot deal with private party sellers or with independent used auto dealers.