Percentage Points « auto loan rates

December 25, 2010

Bad Credit Car Loans – 3 Tips on Getting a Reasonable Interest Rate

Filed under: Finance — Tags: Car Loan With Bad Credit, Consumer Debt, Credit Accounts, Credit Car, Credit History, Credit Score, Credit Worthiness, Creditors, Downside, High Interest Rate, Interest Rate Reduction, Loan Lenders, Loan With Bad Credit, Payment History, Percentage Points — @ 6:53 am

Carrie Reeder asked:

Obtaining a car loan with bad credit is achievable. The downside to purchasing a car with bad credit is that you may receive a high interest rate. On average, individuals with poor credit can expect to pay about 2 or 3 percentage points higher. Higher interest rates may increase you monthly payment by up to $150. Those who can afford to pay a higher monthly payment may be willing to purchase a car with a high rate. Nonetheless, there are ways to improve your chances of getting a reasonable interest rate.

Fix Your Credit Problems

Before approving a loan, lenders review credit reports to determine credit worthiness. Credit reports reveal a lot of information regarding your credit history. Do you pay your bills on time? Have you filed bankruptcy? How much debt do you have? Based on this information, lenders will approve or deny credit. If you have a low credit rating, try and improve your score before applying for a car loan. It takes time to improve your credit score, but it is worth the effort. Improving score involves paying bills on time, reducing credit card and consumer debt, etc. If you have recently filed bankruptcy, consider opening two or three new credit accounts to rebuild credit and establish a good payment history with creditors.

Save for a Down Payment

Having a down payment is a great way to negotiate a lower interest rate on a new car. The average down payment varies. However, a down payment of as little as $1000 can make a big difference. An interest rate reduction may save you thousands throughout the life of the loan. If you are hoping for a very low monthly payment, consider a large down payment. Not only will you get a low interest rate, but you are able to pay off the loan balance quicker.

Compare Fees and Rates

Many people receive auto financing through a dealership. However, it is smart to obtain at least three quotes. The best way to obtain multiple quotes for a car loan is to apply for a loan with an auto loan broker. Brokers are the convenient way to compare lenders. Simply complete an online information request form, and auto loan brokers will negotiate with several lenders to provide you the best financing. After you receive quotes from lenders, compare their rates, fees, and terms. Select the lender with the best financing option.

Roberto

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August 23, 2010

Auto Loans after Bankruptcy – Getting Approved with Bad Credit

Filed under: Finance — Tags: Auto Loans After Bankruptcy, Borr, Co Signer, Credit Score, High Interest Rate, High Interest Rates, Loan Broker, Loan Lender, New Accounts, Percentage Points, Secured Credit Card, Smart Move, Subprime Auto Loan, Timely Payment, Various Quotes — @ 10:04 am

Carrie Reeder asked:

Bouncing back after a recent bankruptcy is challenging, but possible. To begin with, you will need to rebuild credit, which involves opening new accounts. If you need a new vehicle, financing a car following a bankruptcy may be a smart move. Auto loans are easy to qualify for. Thus, you can get approved with horrible credit.

How to Avoid High Interest Rates?

If your bankruptcy was recently discharged, high interest rates may be unavoidable. Yet, there are ways to purchase a new car without paying several percentage points above the current average. Sadly, there are some people paying interest rates 18% or more.

To avoid high fees, postpone financing a new or used vehicle. Instead, attempt to get a secured credit card. Make timely payment for about a year. In time, your credit score will improve, making it possible to obtain an auto loan with a rate of 9 or 10 percent.

Choose a Used Vehicle to Finance

If you are hoping to improve credit by financing a vehicle, opt to finance a small amount. Thus, even with a high interest rate, you can receive affordable payments. Another tactic involves taking charge of the car buying process. Instead of allowing the dealership to determine monthly payments and loan term, inform the dealership of how much you are willing to pay. Your ideal monthly payment should include finance fees.

Use a Subprime Auto Loan Lender

After a bankruptcy, subprime lenders are helpful with helping people secure auto loan financing. Some lenders are shady. On the other hand, a large number of lenders understand your circumstances and attempt to offer affordable solutions. If using an auto loan broker, you have the opportunity to receive various quotes from different subprime lenders. This is ideal for making comparisons and choosing the best loan.

Apply for Loan with a Co-signer

If you are hoping to obtain an auto loan with a low interest rate, it may help to apply for the loan using a co-signer. Co-signers or co-borrowers become responsible for the loan if you are unable to pay. If your co-signer has exceptional credit, you may qualify for a low interest rate on your auto loan.

Jeffrey

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December 10, 2009

Auto Loan Rates – Using Online Lenders to Get the Best Quotes Outside of Dealer Financing

Filed under: Loans — Tags: Auto Loan Rate, Auto Loan Rates, Car Business, Car Dealership, Car Loan, Credit Application, Finance Charges, Finance Companies, Finance Manager, Gift Card, Incentives, Middle Man, Online Lenders, Percentage Points, Thousands Of Dollars — @ 4:15 am

Jason Lanier asked:

If you don’t know what you’re doing, you can get smoked at a car dealership. Most people don’t understand the process that a dealership goes through when comparing quotes and approvals for your auto loan. Understanding this and knowing how you can use the same process to your advantage with an online auto loan, can save you thousands of dollars in excess finance charges and fees.

This is how it works…

When you go into a dealership to get approved for a car loan, the dealer submits your credit application, along with information about the vehicle that you’re purchasing, to several lenders. Each lender responds with an answer that either approves your loan or not, with varying stipulations (if you have bad credit). The dealer then searches through the responses and picks the approval that will make the dealer the MOST money.

How do dealers make money on my loan or auto loan rates?

Believe it or not, a dealership gets incentives for sending your loan through some companies. Finance companies will even pay cash money to finance managers that steer business their way. For example, one company when I was a finance manager, would give me a $500.00 Wal-Mart gift card if I sent them 20 customers a month. Not a bad deal, huh? So do you think that when I could give a customer a better rate with another company, or send them to the more expensive company that was padding my wallet, who do you think the deal went to? You guessed it and that’s one of the reasons that I left the car business.

Also, dealers make money by inflating your interest rate. If you get approved at let’s say, 12%, the dealer can add 3 percentage points to your loan. Some finance companies allow the dealer to add as much as 6 percentage points. So if you walk out paying 15% interest, when you could have paid 12%, think of how much money you would save if you were able to cut the middle man out of your auto loan rate.

The only way around it is to REVERSE the system an put it to work for you.

You can submit your information to lending services online that will cut out the middle man. Buy initiating the financing end of your car purchase online, you can get better auto loan rates, and save money on excess finance charges that you didn’t have to pay to begin with. It’s only dealer profit that stands in the way of you getting better rates and a better approval that is more affordable. When there is no one that has a commission check at stake, it’s amazing at how much better of a deal you can get.

http://www.BuyingCarswithBadCredit.com can help you with lower loan rates. If you have bad credit, there are sources that are willing to help you to overcome the challenges that you are facing, while helping you to rebuild your credit with a good auto loan.

Michele

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October 11, 2009

Refinance For A Better Auto Loan Rate

Filed under: Personal Finance — Tags: Auto Loan Rate, Bankruptcy, Credit History, Credit Report, Credit Score, Debts, Due Accounts, Harder Time, Interest Rate, Interest Rates, Late Payments, Loans, Necessary Decisions, Payment History, Percentage Points — @ 10:10 pm

Tony Beb asked:

Most of the time people will not refinance a loan when they could save money with refinancing. Many times people can be scared or think they have bad credit without knowing. People with bad credit have a harder time obtaining a lower interest rate on a new loan. Generally lenders will offer better rates for people with better credit. If your credit is good your rate should be good. There are many lenders so searching for the right one is a possibility to get a better rate.

On the high side of interest rates someone with a bad credit score will pay around 18%. This person could have filed a bankruptcy or was past due on any credit account. They could have had a lot of late payments, collections and other negative credit items. On the other side people with a good credit score will pay around 5%.

If your credit is pretty bad you might have a limited amount of options. It is always a good idea to check your credit every few months to see if your rating has improved. Time will be your greatest asset to getting a better loan. In general it is pretty tough to get a low interest rate with a bad credit score but you might be within a few percentage points.

Obtain a credit report to view all of your credit history. If you had bad credit in the beginning you might have raised your credit score by paying on time. The overall amount of debt and payment history compared to how much money you make are the biggest factors with your credit score The opposite would be if your credit has become worse. Viewing your credit report should help you to make necessary decisions before applying for a refinance.

You should resolve any past due accounts. Your credit report will show any negative items. If you reduce debts and resolve any outstanding issues your credit can be repaired with time. The best thing to remember is pay your bills on time each month.

Look for loans from a different lender. It is a good idea to look for multiple sources of financing. Lenders will have different rates and you will benefit the most by comparing more than one. Anyone can find a loan regardless of credit history. Online auto brokers can be beneficial to help find the best loan at the best rate. If you find your quote is not going to help you can always find a co-signer.

Marie

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