If you are trying to buy a car and you have bad credit, then welcome to the club, the majority of American’s actually have bad credit instead of good credit. If you don’t have enough cash to a buy a decent car, then you may be looking to finance the purchase by getting an auto loan, the problem is, sometimes getting a car loan when you have less than perfect credit, can be somewhat challenging at times. But you will be happy to know that consumers that have bad credit get approved for financing on an everyday basis.
Now, before getting any type of loan, you should first get familiar with the process so that you have a clear understanding of what you are signing up for. In most cases, if you are financing a car, you will not get it at a bargain price, because there are fees associated with the loan that will be added to the financed amount as part of your approval. The types of lenders that lend money to consumers with bad credit are called sub-prime lenders.
With sub-prime lenders you will not get the best rates, in fact, you will definitely get a rate much higher rate, than what you see advertised on television for buying new cars, and this happens for two reasons. Used car rates are higher than new vehicle loan rates, regardless of credit history and then if you have bad credit, you are also considered to be at a higher risk of default, so lenders will charge higher interest rates.
These lenders will typically offer the following:
- Longer loan terms to help bring the payments down
- They may request a larger down payment
- The loan may have a balloon payment due at the end of the term.
It’s important that you have realistic expectations when applying for financing for a used vehicle, especially if you have less than perfect credit and a small down payment. For a local dealer that specialize in helping consumers with less than perfect credit visit www.easyimportsfl.com/.