If I have a bad credit score, or no credit score at all, can I get approved for an auto loan? If yes, is there a catch? This question represents a very common concern for many car loan shoppers. Fortunately, there is good news for these people! Thousands of people with bad credit situations get approved for quality auto loans every day. Federal Auto Loan can help you get the bad or no credit car loan that you need!
The first thing to note is that banks, like every other company, are in the business of making money. One way that banks make money is by issuing loans to people! So what happens in a down economy when a greater number of people start to experience credit challenges? Banks have to be less restrictive in their lending requirements in order for their business to continue as usual. Because the number of individuals with “perfect credit” or near-perfect credit is dropping every year, lending institutions are offering bad credit auto loans more frequently. Although a bad credit auto loan may not have the same interest rate as a good credit auto loan, it still serves its purpose. Bad credit car loans provide individuals with less-than perfect credit the opportunity to purchase the new car that they need, when they need it. Further, it often helps them repair their credit score in the process.
Second, a car loan is a secured loan by nature. What is meant by the term “secured loan” in this case is that your car is viewed as collateral. Because of this, banks are far more willing to finance an auto loan. Although you may never hear a bank admit this, banks realize that a low credit score does not ALWAYS mean that you won’t pay your bills. They also know that car loans are a great way for individuals with blemished credit to improve their credit score. Assuming you have a good payment history, banks will want to keep your business, offering you more loan opportunities in the future.
Finally, the automobile industry represents an extremely competitive market. For newer car franchises, it is often more important to simply sell a car than it is to make a large profit on that vehicle. A huge part of this is due to the fact that manufacturers pay dealers with incentives based on the number of cars that they sell. These incentives are not based off the price a dealer sells the car for. Because of this, the more cars a dealership sells, the larger (or more numerous) the incentives will become. Financing cars becomes much easier in this scenario because dealers are often willing to sell cars at cost, and sometimes even slightly below cost.
Federal Auto Loan can help you get the financing you need despite your credit history! Our application process is simple and only takes a few minutes to complete! Further, our process is designed to get you a good, bad or no credit car loan tailored to your specific needs.