Bad Credit Car Loans is a Booming Industry
by: bradw
Total views: 68
Word Count: 734
These days’ car loans are a big ticket item. With divorce,
and many other set problems causing consumer set back’s, more people are
suffering from bad credit and bankruptcy each year. Thankfully specialized
lenders have formed to assist people in all regions, no matter what their
credit score is.
Car loans offer lenders a big ticket item with limited
risk. While a lender's risks their entire investment on an unsecured personal
loan a car loan represents less risk since the lender can take possession of
the car if the loan is defaulted. Divorce often leads to bankruptcy and will
impact on a consumer's credit score long after they have recovered financially.
Specialized lenders have recognized that a poor credit score may not reflect on
a consumer ability to make payments and have placed less emphasis on credit
history and more emphasis on ability to pay.
National and regional lenders have emerged to service
the very competitive bad credit car loan market referred to as the
"Special Finance" or "Sub-prime" market. These lenders have
further divided the "Special Finance" market up into different levels
of risks to such an extent that there are lender's who has specifically
targeted the most credit challenged consumer with the highest risk.
The good new is that no matter what your credit
circumstances are, there is probably a lender out there for you.
Another phenomenon is the independent credit service that
will process your request for credit and forward it to the lender that is most
likely to approve the request. These services usually work with a car dealer
who have access to both National and Regional lenders.
The Online
Credit Application
The independent credit service has successfully introduced
the online credit application to the market. The online credit application
offers a no hassle approach to applying for credit. Anyone who has sat in front
of a loans officer and had to explain their credit history will find the online
credit application a blessing. If you decide to complete an online credit
application make sure that it is secure. Look for a security certificate.
Comodo and Verisign are two companies that offer
security certificates that I am familiar with. You should
also look for a privacy policy to guarantee that your personal information will
not be shared or sold.
A car loan is a big ticket item that can help rebuild
your credit score. Some lenders will offer programs that will reduce your rate
or allow you to renegotiate after a specified length of time if you have not
missed or been late on a payment.
There are many lenders who specialize in products and
services for consumers that have troubled financial histories including
bankruptcy. An independent service will provide an online credit application
and will give you access to network of lenders. Simply enter "car
loans" in search box of your favorite search engine. Most of these service
offer tools like loan and budget calculators.
What You Can Do?
The first step before
shopping for a car loan is to evaluate your financial situation. By determining
your income to debt ratio you can see what kind of monthly payment is feasible
for you. You do not want to be overburdened by payments and find yourself in
trouble again. Next you may want to check your credit rating and clean it up
where possible. Your credit score is negatively affected by late payments, high
debt to income ratio and past bankruptcy. Close any accounts that are not in use.
Too many open accounts are a negative. Pay up any outstanding debts. If you
have recently filed for bankruptcy and there are extenuating circumstances such
as a lay off or divorce, consider writing a page of explanation to attach to
your report.
Regardless of your past credit history there is almost
always a lender who is willing to provide you with a car loan. The question is
how much are you willing to pay for that loan? A few extra percentage points
are worth the opportunity to rebuild your credit. But be sure that your
financial house is in order before you apply so that you can qualify for the
best rate and terms your current financial circumstance will allow.
About the Author
Brad Whitehead works as an executive in the special finance department for Car Loans Canada. He is considered an expert on special finance with over 15 years experience in finance industry. To gain more information about securing an auto loan, online car finance, used car finance, new car finance, special car finance, or bad credit car loans please visit
Bankruptcy Auto Loans: Car Loan After Bankruptcy
Rating: Not yet rated
Login to vote