Have you been looking at second chance auto loans? For years and years, if a person happened to have a bankruptcy or bad credit in their credit history, then they knew there was practically no hope at all in ever getting an auto loan – either through a car dealership or even through a credit union or bank. The answer was always “no” if they ever tried. And they walked away aggravated and embarrassed without the car they wanted.
Amazing – Auto Loans Online
Since we have seen the Internet grow and become so popular, consumers are able conduct searches online for car loans. And on top of that, the tables have reversed a little bit as now car dealers and auto loan finance companies are actually competing for borrowers to increase their profits. So this means that we now live in a borrower’s market. This is very advantageous for those who have bad credit and need car loans. In another words, it is a perfect storm for those who are specifically seeking second chance auto loans. And since everything on the Internet is at our fingertips, this means that potential borrowers can cover a lot of ground in a hurry – without ever driving there – pretty amazing, huh?
Second Chance Auto Loans are Definitely Not Created Equal
However, we need to keep in mind that even though auto dealerships and also auto finance companies are competing for borrowers, not everyone seeking a second chance car loan is living in the same circumstances. You need to understand that these dealerships and lenders will still examine your present status along with your car loan request as to how much risk they will sustain in giving you that auto loans you desire. The formula is pretty much the same – it’s just the parameters that have changed a bit.
As we alluded to before, their assessment of the risk you pose to them depends on a formula – and these formulas are typically unique to every lender and car dealership. Thus, the overall risk is computed with this formula, and is fully based on your income, your job, the car you want, the house you live in, and various other factors.
Here are the factors that will hurt you when you trying to get these auto loans:
- When did the last negative event get posted on your credit record?
- Are any of your current loans in default at the moment?
- Has any of your cars been repossessed across past couple of years?
- Have you ever been in bankruptcy?
- What is your current credit score?
- What is your current debt to credit available ratio?
If your particular risk for potential second chance auto loans is high, then you should not be totally discouraged because there are actions they you can take to improve your odds of getting the loans you seek. Let us take a look at some of those factors that will help you.
The first factor is whether or not you have a down payment available for your loan. This will help your status even if they do not require a down payment. Down payments are always good any kind of car loan because of the fact that cars naturally depreciate in value. Reducing that loan balance puts you in a good position if you find yourself later perhaps needing to sell that car.
The second factor is whether you have a reliable co-signor for your car loans. Finding anybody will not necessarily help you, finding someone who has a good credit record will help you tremendously. He or she will help you get a lower interest rate.
The third factor is your level of income. Sometimes people with high levels of income get into temporary financial difficulty on occasion. Their buying may be diminished for the moment by an outside factor – such as divorce or a legal issue. If you happen to be one of them, then you can probably get a good deal anyway.
The final factor is whether you own your home and how much equity you have. If they see a sizable amount of equity, then your problems are probably over – you stand a good chance of getting one of those second chance auto loans.
Be sure and do your homework before jumping into debt for a car loan. Read more here: https://www.consumerfinance.gov/ask-cfpb/category-auto-loans/