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Bad Credit Auto Loans Explained

Bad Credit Auto Loans

 Everyone needs a car to get to work, school or to go shopping. However, if you have bad credit, it might be hard to find bad credit auto loans. Someone with bad credit most likely has a low credit score, and this is what most creditors or loan lenders use to decide whether or not to approve someone for a car loan.

What are Bad Credit Auto Loans?

When you search for bad credit auto loans, you will see a number of lenders willing to give someone with bad credit a second chance. However, these loans usually have a higher interest rate than normal loans for people with a good credit score. This means it will cost you more money in the long term than if you were able to qualify for a good credit auto loan instead of bad credit auto loans.

You just have to do a search for lenders who are willing to work with you and then make sure that the lender is a legitimate one that isn’t trying take advantage of your credit misfortune just because you need bad credit auto loans. Even so, the lender may require that you put down a down payment before they will loan you the money you need to buy a car. Plus you might not be able to qualify for enough to buy a brand new car, and may have to settle for purchasing a used car with bad credit auto loans.

Bad Credit Means Different Things to Different Lenders

Bad credit may mean something different depending on which lender you are trying to get a loan from to buy a car. If your credit score isn’t extremely low, you may even get a normal interest rate loan instead of one that is likely as high as 18 percent or more with bad credit auto loans. While you want or need a car, it may not be worth the monthly cost if it doesn’t fit into your budget, so be sure to browse around and don’t take the very first offer of bad credit auto loans you may be offered.

Don’t just assume your credit is bad just because you’ve had some problems in the past. It’s best to check your credit first by going to equifax.ca, where you are allowed to have one free copy from each of the credit bureaus a year. You will have to pay to get your actual credit score, but you can usually get that as well for just a few dollars. This will let you know where you stand financially and then you’ll know if you have to accept a bad credit auto loan or if you might be able to qualify for a lower interest rate loan.

All in all, if you do have credit problems, it’s still quite possible to qualify for bad credit auto loans in order to get the car you need. You just have to be careful, browse around the different lenders and check all the possible offers that are available for bad credit auto loans.

How Can I Build my Credit from No Credit?

Luckily, credit is a pretty big thing these days, and there are actually quite a number of ways to build it, even from scratch. One of the simplest ways to answer the “How can I build my credit from no credit?” question involves taking out a small loan for something, even if you can pay for it without the loan. The loan should be big enough that it will seem impressive, but small enough that you won’t actually have any trouble paying it back. If you go to the bank for a car loan with no credit at all, they’re likely to say you don’t have a credit history. If you’ve taken out a loan elsewhere, even if it was for, say, a third of the size of the loan you want for an automobile, the bank is likely to say that it is enough for them to give you a sub-prime loan for a car.

Obtain a Credit Card

The way that many people build credit these days is to obtain a credit card. You don’t always need a credit rating to do it, but as you pay back the card, it starts, builds, or improves your rating if you use the card wisely and make payments on time. Make purchases with your credit card, keep track of how much you’re spending, and put away that much money for the end of the month when your bill arrives. Then, when your bill arrives, pay off the entire amount that you charged that month. This is one of the easiest ways to answer, “How can I build my credit from no credit?”

It is important not to fall into the typical credit card traps, however, such as over spending. Not being able to see how much money you have to spend, or needing to write out a number every time you buy something can cause some people to loose sight of how much money they’re actually using. Some credit cards also charge per purchase, so if you’re only using your credit card to build credit, it might be best to only use the card for big things like the weekly grocery run, or filling up the tank, and cash for the smaller purchases, to minimize those hits.

Asking, “How can I build my credit from no credit?” might be different if you’re in a smaller town. Some smaller businesses these days still use credit in the old sense of the word, meaning, “Put it on my tab, and I’ll pay it at the end of the week.” If you live in such a community, and operate through a local bank, you might have an effective enough credit rating already. If you can get these business owners to vouch for you, or if you have receipts proving that you’ve paid off a credit bill at a local establishment, this might be enough for a locally owned and operated bank to give you a sub prime loan. The great part about this is that once you have shown credit worthiness with the sub-prime loan, it will be enough to establish your credit for a larger or national bank in the future, so you’ll never need to ask “How can I build my credit from no credit?” ever again.

Give Auto Mall Loans a call to get help on building your credit from no credit.

Finding Car Loans With Bad Credit In Ottawa

A key factor that the bad credit auto loan lenders will look at is your credit history – especially if you need a car loan with bad credit. For many people, a poor credit history means they think there is a slim chance of getting financed. Most of the time, the only chance to get a car will be at a local buy here pay here lot. Many bad credit buyers that get a car loan find rates are much higher than normal and their vehicle selection is limited. If you think these are the only choices available if you need a car loan and have bad credit, you’d be wrong. For a lot of customers whoe’s credit is not perfect, bad credit auto loans solve a few problems:

  1. Provide transportation to and from work
  2. Reestablish your credit history
  3. Raise their credit scores

The three things the best lenders will scrutinize is credit history, down payment and the credit application. All three of these pieces are important in either approving or denying a request for financing. These constitute “the three Cs” of lending: collateral, character and capacity.

Collateral
The type of vehicle being financed. The amount of the loan on the vehicle (LTV) should be less than 120% of Black Book. Lenders look at the length of the loan to see it fits your credit profile.
Character
Lenders often times separate bad credit into two profiles: situational and habitual credit.

  • Situational credit involves a person makes timely payments, but, due to an unexpected event such as a divorce, illness or loss of job, finds they are in need of a car loan with a bankruptcy and bad credit.
  • Habitual credit is repetitive problem credit that happens time and time again.

Even though both types of credit are considered bad, people with habitual credit may or may not get approved. If a person with habitual bad credit is approved, they might find themselves paying the highest interest rates.

Capacity
This is the amount at which you are actually able to afford based on your current monthly income vs. your current out going expenses. If you can not afford to pay for the fuel because the car payment taps your account, then you do not have the capacity to own a vehicle.

Auto Financing options affected by Your Job and Credit History

Often times low income and spotty job history have a negative impact on their credit decision, while a higher average income and a great job history will help overcome negative credit history. Without knowing this information, how can some promise you the opportunity to get a bad credit financing for a car? The truth is, they can’t. Look for the fine print at the bottom of the page. Remember: an accepted auto finance application is not an approved finance application.

If you are truly interested in repairing your credit, Auto Mall Loans can help you get your next car loan with bad credit. We have helped thousands of applicants to buy dependable used car with bad credit. So if are looking to rebuild your auto credit, avoid buy here pay here dealers that only advertise weekly payment car loans and apply online automallloans.com and we can get you back “on the road” to better credit.

Bad Credit Auto Loan Lenders


Bad Credit Auto Loan Lenders

In Ontario and Quebec following lenders provide bad credit auto loans:

  • TD Subprime (VFC). Owned and operated by TD Auto Finance
  • Scotia Dealer Advantage – Owned and operated by Scotia Bank
  • Carfinco
  • Auto Num

Used Car Loan After Bankruptcy

Bankruptcy should not be the end of the world for anyone, and especially when you are trying to get a car loan. You need a new start, a second chance, and we here at Auto Mall Loans understand that. Maybe you need that car to get to that new job you just got, or to just get your kids to their after school activities so you can spend some time with them.

The past may not be on your side, but you are trying to change things and make a better future. Our professionals are qualified to understand your financial dilemma and are more than happy to work with you to secure a vehicle loan. You may have already approached your bank and were declined for a vehicle loan. This however, does not affect your chances of getting a vehicle loan with us. We can still say YES, after everyone else has said NO.

So whether you’ve had double or even triple bankruptcy, we here at Auto Mall Loans can help you secure a vehicle loan and work with you to get the monthly payments that fit your budget, and at the same time get you the vehicle you want.

Give one our specialists a call today at 613-686-3962 or go ahead and fill out our on-line credit application .

Used Car Loan Rates

A used car loan is the second major loan, next to a house purchase, that you will ever apply for. The interest rate varies from anywhere from 4.99% to 29.9%. It all depends on your credit history and current monthly gross income as well as current monthly payments you are making on any existing loan.

At Auto Mall Loans you have the option of getting a fixed interest rate for your used car loan or a variable interest rate for your used car loan. With a fixed interest rate, your monthly payment will stay the same throughout the terms of the loan. This means that any change in prime interest rates will not affect your monthly payments on your used vehicle loan. With a variable interest rate, your rate will be lower than the fixed rate, but any change to the prime interest rate will affect your monthly payments. This means that if the prime interest rate goes up, your monthly payments go up and if the prime rate goes down, so do your monthly used vehicle loan payments.

An Auto Mall Loans credit specialist will go over all these details with you and explain the benefits of each type of interest rate. Give us a call now at 613-686-3962 or fill out our on-line vehicle loan credit application so that we can help you today!

Vehicle Finance Process

How A Used Vehicle Financing Offer Is Determined

Step 1:
You first need to decide on a vehicle! What age, mileage, and cost are you willing to take on? Remember, the rule is not to spend more than 18% of your gross monthly income. So, if you are making $2000 a month, you should not spend more than $360 a month on your car payment. Buy what you can afford NOW, don’t stretch your budget. This will help you stay on top of things and build a better credit.

Step 2:

Fill out our on-line credit application OR give us a call at 613-686-3962. You will need your 2 most recent pay-stubs, driver’s license, and the amount of your down payment. The higher your down payment, the better chance you have of getting a vehicle loan.

Step 3:

Credit History will be gathered by our credit specialists. They will review it with you and explain all the pros and cons, and answer all your questions regarding your credit score. This is a FREE ONE-ON-ONE session with a qualified credit specialist and an opportunity for you to learn about your credit history. We highly recommend going through this process even if you don’t buy a vehicle from us at this time. This will help you gain insightful knowledge so that you are better prepared the next time you are looking for any type of loan. You may even end up passing on this knowledge to your loved ones so that they understand how to keep a positive credit history.

Step 4:

Down payments do not have to be just cash. You can also trade in your current vehicle as a down payment. Remember, the more you are able to pay up front, the lower your monthly payments will be.

Step 5:

Once you are happy with your used vehicle loan finance offer, we will prepare all the required paperwork to be signed by you. Once signed, all the paperwork will be forwarded to the designated lender.

Step 6:

Before picking your vehicle you must ensure that you have insurance and must provide us a copy from your insurance company.

Step 7:

Your vehicle will sent for emission testing and safety certification. It will be ready for you to pick up at your convenience!

Your Credit Score

Your credit score is basically a number between 350 and 850 determined by a credit reporting agency.  The higher the number, the better your credit, which means a lower interest rate for your vehicle loan.   The following things will lower your credit score:

  • Missed or late payments on credit cards or any other type of loan
  • The number of credit accounts you have and how long you’ve had them
  • The age of your credit report
  • The number of inquiries made by applying for credit (a few inquiries a year is acceptable)
  • Write-offs and proposals
  • Public records such as liens, judgments, and bankruptcies
  • Credit utilization of available funds (how much of your credit limit you’ve already utilized)

A credit score of 650 or higher is considered ideal and you can qualify for a prime interest rate for a used vehicle loan, and most prime customers do not need to provide proof of income.

A credit score of 550 – 650 is considered for a sub prime interest rate (which is a bit higher than the prime interest rate).  Proof of income may be required.

A credit score lower than 550 is NOT considered by the banks.  We will get you the financing you need from our sub-prime lenders.  We have an extensive pool of sub-prime lenders that will provide financing for your next used vehicle loan.

Rebuild Your Credit With An Auto Loan

Rebuild Your Credit With An Auto Loan

Life is not perfect, and sometimes we need a little help to start over and be given a second chance.  Credit rebuilding means getting that second chance and being able to get the financing you need to secure an asset.  We can find you the best terms and conditions to get you your vehicle loan.  Once you get the financing you need, you can turn your situation around by building a better credit history.  Remember, the past does not have to decide your future.

Auto Mall Loans specializes in poor credit used vehicle financing.  We have helped over thousands of customers with not so perfect credit. People from all walks of life face financial difficulties, including celebrities!

People Just Like You: 

  • Poor Credit?
  • Bankruptcy?
  • Double Bankruptcy?
  • Damaged Credit Due To a Divorce?
  • Debt?
  • No Credit?
  • Repossessed Vehicle by Lender?
  • Illness?
  • Loss of Work?
  • Disability?

Our professionals understand all these situations and are more than qualified to help you to rebuild your credit and guide you towards maintaining good credit as you move forward in life.

Our services are FREE, thorough, and we will help you rebuild your credit even if you don’t buy a used vehicle from us!  Our finance experts will make sure you are on the right path to building good credit and securing a better financial future for yourself.

To get started, fill in our on line, no obligation application.  DON’T DELAY, TAKE ACTION NOW!    Until you do, your credit will NOT improve, so go ahead and start now!