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When you are looking for someone to loan you money, no matter what the purpose, you want to be as attractive to that person as possible. So, who do lenders feel most comfortable with when writing car loans? An excellent credit score as well as a low debt-to-income ratio always makes you attractive to a car lender. In addition, many banks and traditional lenders prefer to lend money for new cars.
If your car loan will be written on a used vehicle, and it is a newer car model, less than the book value, and you have a relatively short repayment schedule, your car loan will look more attractive.Car Loan If You Are Not the Ideal Borrower? - Bad Credit Car Loans
Bad Credit, borrowing money for an older car, or needing to finance for an extended period are all reasons that a lender may look cautiously at your loan application. If you are unable to get a car loan, you may ask what would help your case. Often a small down payment may be enough to ease the lender's mind.
If traditional financing is out of the question, the next step is to attempt to get financing through the dealership. Most dealerships offer this service, and would prefer to finance your loan as well as sell you the car. The interest rate will likely be higher than through a bank or online lender, but still reasonable. The dealership who, of course, wants to sell you a vehicle, will often act as an intermediary between you and the lender, and help work out a deal.
If you are unable to obtain a car loan through a traditional or online lender, or through one of the major motor company's credit department, you are left with a few options. If you own your home, you can take out a 293 to pay for your car. The interest rate is reasonable, and you can normally write-off the interest on your taxes, but, you stand to lose not your car but your house if you default.
If your need for a vehicle is not immediate, try saving money for it. Put away the amount of money that would go towards a car payment every month. You may not be able to wait long enough to buy a new car, but if you are faithful with this savings plan, you can easily sock enough cash away to by a reliable used car. In addition, the practice of saving that money each month will be beneficial when you are ready to take on a car loan.
As a last resort, you may have to consider buying a car at a "buy here, pay here" car dealership. These places do not require a credit check, but you will be paying a high interest rate, and you cannot miss or even be late with one payment, or they may repossess your car. Deal with these types of dealerships only as a last option.