How bad is your credit? Perhaps it’s not as bad as you think. If you enter a car dealership without knowing your credit history is at your mercy. Basically you can say what they want and it will cost you when you reach a high interest rate. Some car dealers are on you and tell you your score is lower than it is, justifying why the interest rate is so high. Firstly most people know that your credit score. Do not rely on credit reports because they give you your score. The money you pay for a full report including the score will be lower compared to what you may end up paying in excess of interest in being ignorant. MyFico.com is a service that will give the 3 results.
You must run your credit report. There may be some things there that will greatly affect your interest rate. Some bad credit can be corrected. First, get rid of bad defects can doubt. Close all open credit cards do not need or use. Pay or pay their credit cards. Do not blindly apply for a loan and refused to obtain or get a high interest rate due to factors beyond our control. If your score is less than 620 is a high-risk buyer will have to pay higher interest rates. Each lender has their own definition of what constitutes a high risk borrower.
Apply online for a loan first.
There are many lenders who finance high-risk buyers. It is in your best interest to get approval before going to the dealership to buy. This way you know exactly what interest rate you will pay. The seller does not do what is best for you and you may end up paying more than necessary. Shop around as rates vary from lender to lender.
Dealer for financing.
It is okay to use the dealer for financing, provided they are prepared for their tricks. Have a copy of your credit report in hand so that you can not lie about your score. Learn about the current loan rates and let them know they will not accept a higher rate. Be prepared to get up and leave if their demands are not met. Most dealers have access to many lenders and if pressed hard to shop the best rate. A place to find the interest rate on cars is BankRate.com Just because you have bad credit does not mean to be bullied into accepting a deal that is not happy with. Just say no thanks and go to another dealer.
Here is a list of questions to ask when the business office:
1. What is the precision (to the penny) price I’m paying for the car?
2. What is the total amount being financed
3. What is the amount of money I am paying by credit (financial burden)?
4. What is the exact amount of each payment?
5. What is the total number of payments? Do not get sucked into a loan of 6 years to get your payment lower.
6. Very important! Is this agreement depends on getting subsequent approval of the funding of a third? Note the “object of financing” clause in the contract. This is where you nail. send you home with an agreement approved and referred to call you several days or weeks later to inform you that the financing fell and can not get the rate quoted but found a lender to cover the loan at a rate higher. Make sure the agreement is approved by the lender before you leave the lot. If there is any question, tell the dealer you’ll come back and put the car in which everything is resolved.
7. Is there a prepayment penalty if I pay the loan early?
We advise you to get your car loan online and take it to the dealer. This allows you to focus on the selling price of the car instead of the monthly payment. You can also use your online approval as leverage against the finance office of the dealership. If you can beat your loan approval you can consider for funding.
Buy Here Pay Here, as a last resort.
They have tried all lenders and have been denied. Have you looked at your credit report and find out why they are being denied? At this point you must decide how badly you need a car? There is one last way to get a car. There are many “Buy Here Pay Here” dealers so do not get strong armed into a car that meets your needs. Be very careful that you are buying a used car or quality can end up with a piece of garbage that is in the shop on the road. Many small dealers buy auction cars unwanted wholesale can not be in very good shape. You have the option to leave any dealer who is trying to sell a piece of trash a mile high. There are plenty of large distributors that sell quality used cars that offer domestic financing. Always explore your options before signing anything. You should avoid any dealer who is offering a 20% + loans. You should expect to pay about 18% or less.
Bring appropriate documentation to expedite the process. Most dealers want the following steps to process a loan with them. Have the following items in the folder to your arrival at the dealership. Driver’s license, proof of auto insurance, financial information (bank information and credit card), Social Security number, references, proof of employment and pay stubs, proof of residence, phone bill or current utility bill or other), and a down payment. We recommend that you call the dealer first to get a list of exactly what they need.
Find out what type of payment you make? Do you have to deliver the payment or making a payment by phone or online? What is your late payment policy? If you are late on a payment not want to wake up and find the vehicle has been recovered during the night. Do they sell low quality vehicles of a mile? It is in their interest to sell quality cars, but there are sellers out there selling garbage. Do they report to credit bureaus? You want your good credit with them to be reported to help build your credit score back up.
Repair and improve your credit!
Bad credit can be arranged. It takes time but worth the effort. Although it is possible that a high-interest loan today, if you work hard on improving your credit your auto loan is much lower. Beware of credit repair companies that promise to fix your credit fast. If using a credit repair company makes sure they are trustworthy.