Getting started with bad credit auto loans
It can be tough to know where to begin when you’re looking for an auto loan. And that stress you may feel as you start the process is only increased if you struggle with bad credit. No matter what your credit situation is, we at Federal Auto Loan want to provide you with the help you need to find the best auto loan for you. We hope to get you started on your way to bad credit car loan approval, and help you end up in the car that will best fit your needs. First, we’ll explain what you may want to know about bad credit auto loans. Then, we’ll let you know how we may make the bad credit auto finance process easier for you.
The Basics of Auto Financing and Auto Loans with Bad Credit
If you are new to the car loan process, the following are some of the basics regarding auto loans and auto loans with bad credit. If you are in need of a car, but don’t have the money to purchase one outright (like most Americans) you’re probably going to need auto financing—or a bad credit car loan depending on your credit standing. With the help of special financing, you’ll be able to pay off your car incrementally each month. By breaking the total cost into chunks, cars can be affordable to most.
An interest charge will be tacked on to the car payment each month. Interest is paid to the lender, from the loan recipient, as payment for borrowing money. It is calculated as a percentage of the total amount of the car loan, and can vary greatly from person to person. The best indicator of what an interest rate will be is the car loan applicant’s credit score. A credit score is basically a rating system created to let lenders know whether or not you’ve been diligent in paying your debts in the past. Generally, the lower the credit score, the higher the interest rate will be; the higher the credit score, the lower the interest rate will be—and you want your interest rate to be as low as possible.
Lenders and Dealers
There are a couple of main routes people usually take when looking for a car loan:
Direct Auto Loans
A direct auto loan is one that is provided to you directly through a bank or lending institution. You would apply for a loan, and if you’re approved, they’ll give you the amount that you were approved for. Once you have your loan, you can look for a car that fits within the amount you were given, and make car payments to the bank or lending institution.
Indirect Auto Loans
If you look for an indirect auto loan, you’d begin your car search at a car dealership. Then, after you find the car you want, the person you’re working with at the dealership will try to arrange financing for you through another financial institution. If they can’t, you may need to choose a different, less-expensive car.
Now, if you choose to look for a bad credit car loan on your own, there will be challenges that you may face. Many times, both direct and indirect lenders don’t have a specialized bad credit auto financing department. And because the bad credit car loan process is different than the traditional process, a specialist is needed to improve your chances of being approved for a bad credit auto loan. To make it easier, we at FederalAutoLoan.com may be able to match you with one or more of these specialists already willing and ready to work with you.
Bad Credit Auto Loans and the Federal Auto Loan Difference
Federal Auto Loan is a consumer connection company designed to try to find the best lenders and dealers for anyone needing financing. Whether you have good credit, bad credit, or no credit… We try to make it easier for you to begin the car loan process. After you fill out our free application form, we will send it to our extensive network of lenders and dealers—many of which are experts when it comes to bad credit auto loans. They know the subprime car finance credit market, so they’ll be able to work better with you on. From there, we try to match you with the best lender or dealer (or perhaps more than one) for your situation—one who is already ready and willing to work with you. You can forget about running around to multiple dealerships hoping for the best deal or to even be approved because we handle that step for you.
The best part is that everything within our site, including the application form, is completely free for you to use. And even if we match you with a lender or dealer, you have no obligation to work with them. You could even get in touch with them to ask questions, and still decide against working with them if you feel that’s best choice for you. So really, by accepting our help, you have nothing to lose. The application form is SSL-encrypted, so it’s safe to use, and only takes a few minutes to fill out. Any legitimate application that we receive will be sent to our network of lenders and dealers. Unlike many consumer connection companies that may not even give you a chance, we will not filter out your application for accounts such as repossessions, bankruptcy, or bad credit. Finally, our company is highly rated with the Better Business Bureau. You can begin your car loan search with us, and we’ll do our best to make your auto finance or bad credit vehicle loan search an easy one.
What Lenders and Dealers Consider Before Approving You for a Bad Credit Auto Loan
If we’ve matched you with one or more of our lender or dealer partners, you may wonder what’s next. Your match will look at certain aspects of your financial and living situations, and then decide whether or not they can approve you. First and most importantly, they will need to decide whether or not you can afford a car loan. They will check to make sure that you have a steady income, and then see if you have enough money left—after your current fixed expenses—to make a monthly car payment. You could utilize an auto finance budgeting calculator if you’d like to know this information before you see your lender or dealer.
Lenders and dealers will also need to learn your credit score. Like stated towards the beginning of this article, an applicant’s credit score is the main determining factor in the interest rate you will receive. If you have a relatively high credit score, you will probably receive a lower interest rate; and vice versa.
Ultimately, we believe that our company could give you the best chance at bad credit car loan approval, and we encourage you to let us help you start. Apply today, and see where we can take you. Good credit. Bad credit. No credit. All good.