Loving a car is an American legacy! We were born with this incredible passion and love for cars. If you want to fulfill your dream of owning a new BMW, Audi or Chevy, you have to take part in car loans. Now, when it comes to new car loans, one of the things that terrify us is our bad credit history. But rejection due to bad credit history will now go down in history! When it comes to bad credit score, think about taking it out of the box. Read this amazing new car loan guide to stay focused on your car purchase path.
New car loans for buying a new car – Why is it necessary?
A new car costs more than $30,000 and prices are constantly rising. Now to buy a new car, you need to cough up to almost $3000 extra. This means that car loans have become a necessity.
Everyone wants a piece of cake
New lenders and online car financing companies have made auto financing globally competitive. Everyone wants to contribute to the customer’s expenses. This means that it has become very easy to get approval for a new car loan.
It is much easier to get a bad auto loan today than it was in the past. A bad credit history is certainly not a problem for lenders now. Here is how easy it is to sign a new car loan agreement despite a bad credit history.
Advice on a new car loan from Bad Credit
1. start with the budget
We all know how addictive cars can be! That is why it is better to know how to spend your free time before choosing your dream car. Calculate your income and expenses before deciding on the type of car you want. This will avoid further damage to your credit score.
Proof of income
Even if you have a bad credit in your credit report, it is important to earn a decent income. A good income ensures regular payments. This is very important for lenders who offer auto financing options for bad borrowers.
Your proof of income may be your recent pay-stubs. A self-employed person can provide an IT statement as a validation of regular income.
No advance payment? NO PROBLEM
Don’t worry if it’s difficult for you to make an advance payment. There is absolutely no need to make cash deposits. You can exchange your old car. Its value will be deducted from the cost of your new car and voila! Your problem is solved.
Most car manufacturers offer discounts in the name of incentives for customers. You can ask the dealer to use the discounts as an advance payment. This means that you will actually put your money down without taking a single dollar out of your pocket.
Options other than USUAL
Most buyers of bad credit cars offer shorter credit terms with higher monthly repayments. It is a little more difficult to make regular monthly payments in excess of $500. This increases the chances of non-payment. So, think creatively and understand the innovative options that are available on the market before signing on the dashed line. It is better to explore all the choices so that you can choose the payment schedule that suits you best.
You can choose to pay by balloon. With this option, you can make lower monthly payments and then make a huge payment at the end of the credit period. This may be ideal if you are planning the last payment from the very beginning. With an inexpensive monthly payment, you can put some money aside for the last payment. This will help you avoid higher payments.
The average credit period for a car was 65 months in the last few months of 2012. Currently, the loan period is 70 months. Today, lenders are waiting for an extension of the loan period to 97 months. This is due to the fact that most car buyers cannot afford high monthly payments. As the shelf life of cars grows from year to year, they can be used for longer periods. This makes such longer periods a reality.
So, when deciding on a new car loan with a bad credit history, remember to try out other options. Look for information about current trends in the car finance market, because it will help you to get the best car loan offer.