In order give you an overall picture of the car financing industry we will start with the basics on the most common auto financing terms and conditions and then cover auto secured loans for people with bad credit. The thing that is done when applying for an auto loans is to pull the credit of the potential buyer because this will determine their score and the available auto loan options for which they will qualify.
An auto secured loan is exactly what it sounds like. Which means the loan is secured by collateral and that collateral is the vehicle being financed. If you fail to pay according to the terms of your car secured loan the vehicle will be repossessed. If the car is returned to the dealership or it was repossessed the borrower is still responsible for any balance that remains beyond the value of the vehicle and any costs to recover the car.
Your credit score is the primary factor to qualifying for any type of loan nowadays. All car loans are structured and approved or not approved primarily based on the credit score of the borrower. Years ago auto loans were either a yes or a no, but today lenders use a tier system to structure loans which will dictate the interest rate and terms.
Auto Secured Loans vs. Credit Scores
720+ Credit Score is considered very good credit by most all lenders and will allow the borrower to receive the best and most favorable terms.
680+ Credit Score is a good score and will also qualify for the best terms and conditions when we are talking about most auto secured loans, but some lenders may raise the interest rate slightly because they feel there is more risk than a borrower with a 720 score.
640+ Credit score is by most lenders standards considered to be marginal. Therefore this borrower will pay a higher interest rate for a shorter term and be required to have a larger down payment than a customer with a high score.
600+ Credit Score is what the auto industry calls sub-prime credit. This means that traditional auto secured lenders will not approve a loan for this borrower. There are only two options for the car buyer with this credit score. The first one is a traditional dealer that works with sub-prime lenders that charge a high interest rate and require a substantial down payment. The second option will be Buy Here Pay Here in-house financing.
580+ Credit score is poor credit when it comes to lenders and if a borrower is going to get an auto secured loan they will need to do business with a subprime lender or work with Buy Here Pay Here car dealerships.
525+ Credit score is a bad credit score and if you need to finance a car your only option will be to talk to a buy here pay here car dealer about auto secured loans for people with bad credit.
480+ Credit score is a very bad credit score. With a 480 score you only have two options for financing a car and the first option is all cash…..one payment. The second and only viable alternative is the auto secured loan for people with bad credit. Talk to a Buy Here Pay Here in house financing dealership to discover your options. See the BHPH Directory for a dealer near you.
Even if you have a bad credit score and history there are still ways for you to buy a car. More traditional car dealers are operating buy here pay here cars departments because there is a need. There are many buy here pay here car lots that offer auto secured loans for people with bad credit because we all need cars to live in today’s society.
The Main Buy Here Pay Here Car Dealer Directory
…Save some time and be approved before going to the dealer…
