Auto Loan Bad Credit Online

One of the most disappointing situations in life is needing to purchase a car but being turned down for a regular auto loan. Fortunately, there are many lenders willing to write a bad credit auto loan. Before accepting such a loan, though, borrowers should be aware of several facts.

Many lenders will give a borrower a bad credit auto loan only if there is a prior auto loan on the credit report. When a dealer finds that a potential buyer has bad credit, they will offer a loan, but it will have an extremely high interest rate. In addition, the dealer may trick you into purchase extras such as an extended warranty, life insurance, or VIN etching. The dealer can make it sound that without the items the loan will not be possible. Many people are willing to accept whatever the dealer tells them about the loan. Before long, the buyer finds out that he owes twice as much on the loan as the car is actually worth and has steep monthly payments, to boot.

To avoid many of the pitfalls of a dealer-financed loan, many potential auto buyers can look for a bad credit auto loan online. Most financial experts will say that an individual should clean up their credit report before jumping into such a major purchase, but as anyone without a car knows, life is so much more difficult without reliable transportation. In many situations, a car is a necessity. If there is no other option but to buy a car at all costs, it is recommended to secure the online bad credit auto loan before selecting a car. This will streamline the process immensely because not every car can be financed by a bad credit loan. This will save the buyer a lot of frustration later on.

By getting an online bad credit auto loan, a borrower is putting himself or herself in a much better position than by first visiting a dealer. When you do visit the dealer, the buyer will be armed with the knowledge of how high a loan they can qualify for and the lowest APR available. This will prevent dealers from trying to give you lot financing for a lower amount or a higher APR. Extended warranties should also be avoided on the loan no matter what the dealer says about them. The interest paid on the warranty will often be more than the amount of any repairs needed.

Another piece of advice for getting a bad credit auto loan online is to be honest about the amount of a down payment that you can make. To be in the best position possible, a buyer should be prepared to put down 20% of the total price of the car. The higher the down payment, the better the selection of cars that will be available.