Auto Loan Pre Qualification
Loan providers always prefer to play it safe especially in these troubled economic times when the market conditions are bad and many individuals are facing pay cuts and job losses. If you happen to have poor credit ratings and desire to go in for standard auto dealers or creditors who provide auto loans it is recommended you improve your credit ratings by engaging in a credit score recovery program. If you are pressed for time and it is important to avail your car on a priority basis it is advised you search out for creditors who specialize in providing credit facilities to people who have low FICO scores and bad or poor credit ratings. Many creditors provide poor credit car loans and the best place to find them is to be online and search the net by Googling with the correct keywords. Required monthly income Generally loan providers look out for a monthly income that is within $2000 to $2500.
A non-fixed APR means that the interest rate on the loan from the bank or in some cases the dealership itself would fluctuate at the end of a year. At the beginning of the New Year the bank can either decrease or increase your APR and although they are rare a decreased APR could be obtained under the precedent that your financial institution is working with you to help you repay your loan. This could stem from a financial hardship or simply not having enough money at the time to repay your loan. To counteract bad credit a bad credit auto loan can be applied for. These loaning situations are for those that have a credit score of 600 or lower. When applying for loans if your score is below 600 its very likely that a loan corporation or business will simply pass you over.
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Some negative factors that might be considered when you apply for auto loans are: • How long ago was the last negative entry on your credit report? • Do you have accounts that are currently in arrears or in default? • Have you had a car repossessed in the past few years? • Are you currently in bankruptcy or has your bankruptcy been discharged? • How low is your credit score? • What is the ratio of how much credit that is available to you (e.g. credit cards and open loans) as compared to your debt? That being said there still are factors that can mitigate an automotive dealership or lenders risk to positively influence the outcome of your application: • Do you have money for a down payment available? Even if a down payment is not required making one can be a smart thing to do.
But once you get out of it the risk factor reduces. Also coming out of bankruptcy is a major success. Lenders think that if you can successfully handle a bankruptcy car loans would be very easy for you. Keeping this in mind its best to apply after discharging your bankruptcy. How Long To Wait Before Getting A Post Bankruptcy Auto Loan? Every lender has separate lending criteria. There are many lenders who offer auto loans to borrowers with open bankruptcy. But the interest rates will be very high if you apply for an automobile loan with open bankruptcy. So its best to wait until you discharge bankruptcy. You can submit the car loan application the very next day of discharging your bankruptcy. However if you are not in urgent need of a car its advisable to wait for two to three months.