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Second Chance Car Loans Can Break a Cycle of Bad Credit
What's On This Page:
- 1 Second Chance Car Loans Can Break a Cycle of Bad Credit
- 2 Without 2nd Chance Auto Loans You Will Struggle
- 3 How Second Chance Auto Loans Help
Second chance auto lenders understand how frustrating things can be when you have bad credit and you need a car loan with a second chance to fix your credit.
Many young couples start with some good credit they acquired over time through some small purchase. Then they experience some unforeseen circumstances like job loss, divorce or separation with unsettled auto loans.
Before they knew it, they missed some payments or defaulted on a loan. In turn, their credit score dropped. Now they are struggling to break a cycle of bad credit and get out of a poor credit bracket.
Break a Cycle of Bad Credit With a Second Chance Car Loan
Fortunately, Second Chance Car Loans can break a cycle of bad credit and help you get back on your feet with second chance auto refinancing or second chance car loans with improved interest rates.
Valley Auto Loans Offers Second Chance Car Loans Online!
No matter where you go, you seem to be turned down for loans, despite your ability to pay back the loan. Though your financial situation may have changed, the average lenders are not willing to take the risk. The auto loans from car sales dealers have large down payments with loan terms that are too expensive for the price of the car offered.
Many car dealers have limited vehicle selections for those with bad credit and need the dealer to finance their car loan.
What you need is a second chance auto loan lender who “specializes in lending to people who need to repair their credit“ and get a decent car loan term and APR.
Online, second chance car loan Lenders who will let you “purchase a car from any dealer you wish and select cars you prefer“ to own are what you need. Some online financing lenders only let you choose cars from their select car dealers.
Where you want to purchase a car from should be your choice.
What Are Second Chance Car Loans?
A 2nd Chance car loan, also known as a subprime auto loan can help you turn things around by:
- Giving you an opportunity to finance that badly needed car and
- Give you a good car loan with lower finance rates than a typical lender will offer
- Along with all that, you can start building better credit ratings with a second chance car loan
If you are trying to purchase a car with a below average credit score, a bad credit auto loan can repair your credit score within the next year if you make your car payments on time. With lenders from Valley Auto Loans, you are not limited to buying from second chance auto sales lots. Our 2nd chance car loans let you pick the vehicle and the location you wish to shop from. You can even buy from a private car seller.
Try and do that with other bad credit auto loan lenders!
Online, second chance auto lenders or poor credit auto lenders are different from most lending institutions. They know people need cars, and bad credit can come in many forms. This, however, doesn’t reflect the borrower’s ability to pay back an auto loan.
Lenders who offer second chance car loans for people with bad credit look closer at the borrower’s income and job status than they do the credit score. Companies like Valley Auto Loans specialize in working with people who have negative marks on their credit reports but have good jobs with a steady income.
You can even use second chance car loans as a way to get cash for consolidating debt or paying off other debts. By refinancing your car loan to get cash out of the equity, you can get a secured car loan with a lower APR than you can get with a personal loan. Unsecured, personal loans have the highest interest rates available on the market.
Bad Credit Cycle and Second Chance Financing
Those with bad credit often get stuck in what’s known as the “bad credit cycle.” Bad credit usually starts small, with a few missed payments. Maybe a job loss means that you were not able to keep up with things.
Perhaps you did not have the maturity to handle the credit card you were given in college, or your first car loan was not a good choice. These small mistakes start to add up and drastically decrease the score.
After a few years, you find that your credit score is so low that you do not qualify for new credit cards or car loans. This is when second chance auto financing is needed.
2nd chance auto financing car loans can rebuild your credit rating. However, if you want a loan term you can afford, it must be done with a reputable no credit car loans company.
Valley Auto Loans chooses second chance car loan lenders who commonly approve bad credit car loans. They also find to their surprise that the APR they are offered can be a lot lower than other banks and lending institutions.
Without 2nd Chance Auto Loans You Will Struggle
Without Second Chance Financing to fix your Bad Credit,
- If you do qualify for a loan, the interest rate is usually higher than the rate someone with enough credit would pay. For example, according to our car payment calculator, someone taking out a $15,000 car loan for four years at 3 percent will be paying around $330 a month. At 5 percent, that payment jumps up to $345 a month. $15 may not seem like a big difference, but for anyone struggling financially, it can make things a lot harder to pay.
- People with bad credit may have to pay a hefty deposit to have the electric company turn on the power at a new place. They pay higher rates on credit cards and mortgages because lenders are not willing to cut them a break because of a bad credit rating.
- It is also harder to get the money together or qualify for credit cards. Buying on credit when things go on sale. Your budget is just not set up for a down payment or larger car payments. Car dealers, used cars and truck prices are on the rise and second chance loans for vehicles are a must if you have bad credit or a history of car repossession.
- A person with bad credit will pay a significantly different amount of money than someone with good credit when it comes to making simple, everyday credit purchases. When it is harder to afford the payments for these basic living expenses, it is easy to fall behind on payments, which then means that the credit score stays low. This is the cycle that those with bad credit can become trapped in. 2nd chance auto loans can be the beginning to better credit and bigger savings.
How Second Chance Auto Loans Help
With a second chance auto loan or second chance leasing, you get to make a new start even if you have gone through bankruptcy. Though it is true that your rate is going to be higher than the rate of someone with an average credit, with second chance car loan approval, you have a chance to turn things around and improving your overall credit status.
How? You make a commitment to paying this loan back on time. This can be done by buying a new car with a new loan, lease or refinancing your existing loan.
Unfortunately, many of the types of payments you make in your everyday life are the kinds of payments that don’t factor into your credit report. You might faithfully pay your rent on time every month, have automatic withdrawals for your utility payments, but these companies do not report your good payment history.
An auto loan, however, does. For people who are struggling with poor credit, second chance financing with subprime auto loans can be used to rebuild your low credit score faster than revolving credit as with credit cards.
- With second chance car financing or,
- Second Chance Leasing.
- Consistent on-time payments.
- You will see your credit score start to rise.
- In a short time, you will be eligible to refinance your second chance auto loan for a better rate.
- You can use all of the extra money that you are saving in interest to pay off debts or start building up your savings.
- Overall, you will be in a better position to qualify for bigger loans such as a mortgage, which can be less money than you are paying in rent.
Qualifying for a Second Chance Car Loans
We take getting an easy loan for bad credit seriously
When you apply for second chance auto loans through Auto Valley Loans, we know that you are going to have less than stellar credit. What we want to see is that you have a strong ability to repay the new car loan.
You will need to show proof of employment in the form of past paychecks.
The longer history you have had with your current job, the better. We offer many car loans if your income is below average and you struggle with bad credit.
2nd chance car loans require the borrower to earn at least $1,500 per month.
To qualify for a low-income auto loan program, you will need a gross income of at least $1,500 a month. This should include all forms of income you have including child support, bonuses, and disability payments.
We will also need to see that you have some bills that you have been paying on time. With all of this data, we will be able to match you to the best lender for your situation to secure financing to purchase a new car.
Fill out the second chance auto loan application fields completely.
Remember to fill out all the application fields completely and don’t leave any blank. This will improve your chances of getting the best loan terms and interest rate.
A co-signer can also help you get approved for one of our loans if your credit score is below 500.
Buyers Beware of Second Chance, Car Dealer Lots
If you need a car, and you are thinking about using second chance auto lenders to help build your credit, you need to be careful of local, used car dealer lots.
There are two types of “second chance auto loans” – ones that you get from a financial lender and ones that you get directly from the used car dealer. The car dealer loans are offered by places that say Buy here, pay here or Tote the Note. They could try to entice you with 0 down car loan offers or offer second chance leasing.
These dealer loans are not always good for you. Sometimes, they do not report to the credit bureaus, which mean that you are not getting any credit benefits from making your on-time payments with the higher interest rates.
If you want to build up your credit by using the best 2nd chance auto loan companies, you need to search for a lender who’s going to tell credit bureaus that you are doing a good job.
Quality financial institutions provided by Valley Auto Loans will report your history to the major bureaus, letting them know that you are turning things around. When other lenders see your recent history of on-time payments, they may be more likely to work with you as well as helping you repair your credit.
Building up your credit score to get better deals is a long process, but one that’s worth it. What you need most is a company that’s willing to work with you that gets you started on the right path. That is why we offer to find, good quality second chance loans for you.
A Short, Simple Application, You Can Fill Out On Your Smartphone.
Valley Auto Loans features a simple and short application that is easy to fill out online, right where you are and submit by your smartphone. We offer second chance car loans, new or refinancing and second chance leasing. Also, we will compare lending companies and find you good, second chance loan offers for that needed car loan. We know that you want to make things better through rebuilding your poor credit history and we are willing to take “second chance auto loans” on you.