Most people, unless they are rolling in bling, will need to get a car loan if they are going to buy a car.  Many people won't need to go any further.  Their credit is good and they are in and out of the dealership just like that (although granted a little slower than in the past).  But what about auto loans for people with bad credit?  It's more common than you think, and the circumstances for bad credit aren't always so negative. 

Think of it as a spectrum.  On one end of the bad credit spectrum is people with no credit, which means they have never taken out a loan and paid it off, or are not currently paying anything off.  This is common with young people, namely college students.  See also ex-felons recently released from prison.  It's more an issue of circumstance than consequence, although I'm not sure what a felony does to one's ability to get a loan.  In these times it will be more difficult to get an auto loan for those who have no history of making payments.  Simply put, no credit is bad credit. 

On the other end of the spectrum from no credit is debt.  This can range from having a high debt to income ratio (too much debt with not enough money or assets to cover it), having a history of late payments on debt, or defaulting on past loans.  This is by no means a good place to be in, but once again, sometimes this is beyond our control.  

Either way, companies aren't going to loan you money if you find yourself in one of these situations...and it's happening with more and more people.  Yet you need a car.  You need to get a loan.  This is where Roadloans comes in.  If this is you, check us out.  

 

Those who are new to the world of auto finance may need help understanding what they are getting into.  The truth is, there are lots of variables that can change on a dime.  That's what makes it all so exciting!  Whether buying used cars or new cars, the process is much the same, but there are some pitfalls you need to be aware of.  Check them out here. 

1.       Applying for a refinance takes a lot of time

Completing an auto refinance application is fast an easy. It usually just takes a few minutes to complete the online form.

2.       I need to get my car appraised before I can refinance it

Contrary to refinancing your home, refinancing your automobile does not require an appraisal. You won’t have to worry about incurring appraisal expenses since lenders determine the value of your car by using Kelly Blue Book, NADA or a similar tool that provides vehicle values.

3.       It costs a lot of money to refinance my car

Most lenders do not charge any application or closing fees for you to refinance your auto loan. Depending on your state, a title transfer and/or registration fee may apply, which usually ranges from $5 to $65. Most lenders pay the fee on the customer’s behalf, and simply add it to the final loan amount. 

4.       I’ve had credit problems in the past, so I won’t qualify

Lenders understand that things happen in life. Having gone through some tough times in the past does not mean you can’t be approved. Even applicants with previous Chapter 7 or Chapter 13 bankruptcies can be approved, as long as the bankruptcies are discharged. The only way to find out if you qualify is to apply.

5.       I will not be approved because I am self-employed

Even if you are self-employed you can be approved to refinance your vehicle. Just like any other applicant, it is important that your income is verifiable. For self-employed applicants, this usually means providing an IRS form that allows your lender to request transcripts of your last 2 tax returns.

Pretty interesting article written a couple of years ago about the history of car loans.  According to the author, the article was written so that people could "gain a working knowledge of car loans, so that when you go to get one, you’ll know where they came from, why they were invented, and how all that affects the transaction you’re about to undertake."  This is indeed important.  As car loans have become a staple to the vast majority of those buying new and used vehicles, the tendency is for people to assume that they have always been there.  There are so many moving pieces behind each transaction with o many people vying for their piece of the pie.  Simply put, so much business!  And that is what makes it all so interesting.  Read on and get some foundational street knowledge about the industry. 

When shopping for a car a good payment calculator is a necessity.  You want to know how much your payments are going to be.  If you haven't seen it, our very own Roadloans.com has a wonderful payment calculator that allows you to figure out your monthly payments from the total of your loan, or the total of your loan from your monthly payments.  Our in house mathmeticians have been working around the clock to bring you this piece of mathematical genius.  Check it out here.