Do you know the When, Where, to get the to Get The Best Interest Rates and How Special Financing Lenders are looking at your credit?
In these economic times, it can be challenging to maintain an excellent credit rating. However, job losses, illnesses, bankruptcy, divorce, no credit history and other financial issues crop up in the lives of most families sooner or later. It can be difficult to keep a good credit rating during these times of trouble, and it is easy to drop some credit score points when finances get stretched.
Lenders for People With Low Credit Scores
If you are in the market for a car loan, you already know lower credit scores equals higher interest rates. You also know that means you will pay more to borrow money than someone with a higher credit score than you. However, did you know that there are ways to shop for the best car loan deal even if you have a low credit score?
People in your financial situation still need reliable transportation to get to work or take your kids to school. This may cause you to think it is impossible to qualify for financing.
Let’s Look at the answers to a few basic questions you may be asking:
When should I apply for a Special Financing auto loan?
Where is the best place to get the best interest rate on an auto loan?
How do I find the best car loan lender for special financing situations?
Here is the good news!
The good news is that you can find second-chance special car financing or bad credit auto financing companies that are willing to provide special financing with lower interest rates for auto loans to people without excellent credit histories. Your credit score is not the only factor that car loan lenders look at when they set your interest rate.
Here are five easy steps you can take to improve your chances of landing a good deal on a car loan.
As you research a pool of auto finance lenders for various types of car loans in the United States, you will see that the amount of interest they charge their borrowers varies from lender to lender even though they have the same credit score. Personal loans also fall into a diverse array of APR rates for a person with the same credit rating. When choosing to take out a personal loan, bad credit car loan or refinance a car loan, you should look at the facts.
How to Find A Low-Interest Car Loan
- The lowest interest rates seem to be offered by the vehicle manufacturers such as Ford Motor Credit, Toyota Motor Credit Corp., and Chrysler Capital just to name a few. They typically offer about 40% lower interest rates than the average lending rate, however, qualifying for these rates can be difficult if you have a bad credit history.
- Local or Regional Banks and Credit Unions are different sources of auto loan lenders, but they have been known for having the highest lending rates to people with subprime credit and can be one of the most difficult places to qualify for a low-interest car loan. On average their rates can run about 10% higher than average.
- The best option for someone with bad credit to get a lower interest car loan is to shop around the lending pool for special auto financing. Also, the best way to do that is to use an auto loan broker service. These services are known for finding you the best offers quickly, and this allows you to be selective as to which loan offer you choose. Many loan brokers like Valley Auto Loans offers free application and no obligation services.
Know Where to Shop And Save Money
For a typical Auto loan from the average lender, your credit score will play a significant role in determining how much money you stand to pay for your loan. If you have a reasonable credit score of about (620-659), you will spend approximately four and a half times more compared to someone with a credit score of (720 or higher)
With Special Financing from Valley Auto Loans, the lenders look closer at your work status and your ability to repay the loan. This is typical for bad credit lenders, and that is how they can be more competitive with their interest rate offers for each person applying. This means that compared to other lenders you may be able to save a couple of thousand dollars on a $20,000 car over a five-year loan term depending on the interest rate you qualify for.
At Valley Auto Loans, we specialize in helping people find the best possible car loans in a variety of situations. Self Employed Loans, Student auto loans, Bankruptcy Loans, total loss due to an accident, High Risk and No Credit Check Loans just to name a few.
We can offer the best information about special financing options like In-House Financing, Tote-The-Note Financing, Zero Down Financing, Financing with Child Support and more. All these topics can be found in this Special Financing information guide under the appropriate heading to help you make the best financial decisions when you are looking for special financing auto loans.
Types of Special Financing For Cars
What is special financing? Auto loans are a form of secured debt. This means that the loan is secured by the vehicle that is purchased with the loan. Mortgages are another typical example of secured debt. In that case, the mortgage is guaranteed by the home it is used to buy.
Contrast that to unsecured debt like credit card balances. Credit bureaus and finance companies tend to look more favorably on secured debt when they calculate credit scores or decide whom to loan money to. This is partly because secured debt is already backed by a valuable asset. There are several reasons that secured debt is more favorable than unsecured debt, and these include: