Posts tagged: auto loans bad credit

Bad Credit Auto Loans after Repossession or Bankruptcy


For a guy like me who has spent more than two decades in the loan business, it’s still hard to imagine a type of loan where absolutely anybody gets approved. But the fact is there are bad credit auto loans that absolutely anyone can qualify for. I suppose that’s not such a bad thing. If people can’t get reliable transportation, they have a very hard time keeping steady employment. I don’t want more people in the welfare offices just because they had a repo a couple years back and now they can’t get a loan to buy a car.

But if you have damaged credit and you’re looking for $5000 auto loans, you probably have a few questions, and I’m guessing two of the more commonly asked ones will have to do with repossessions and bankruptcy.

First, repossession. Yes, there are lenders who won’t mind a repossession, even if it happened in the last year. But there will be some conditions. The repossession can’t have been part of a bankruptcy, and there still technically needs to be a balance on the account (even if you’re not making payments anymore). If you’ve had a repo you’ll have to bring a bigger down payment to the table, and lenders aren’t going to want to finance an old clunker, so you’ll need to buy a more recent model car that still has a warranty in effect. Make sense, doesn’t it? If you flake again and they’re left with a car, they want one under warranty so they can fix it for free (if it needs repairs) and sell it at a higher price.

And what about bankruptcy? Yeah, you’ll still be able to get financed even if you have a bankruptcy on your record. But again, some conditions. One, the bankruptcy will have to be complete and discharged. They don’t want you applying for a loan while you’re in the middle of asking the courts to let you off the hook with the rest of your debt. Second, your bankruptcy trustee will have to give you a document called an Authorization to Incur Debt for you to include with your application. That pretty much explains itself doesn’t it? If you’re bankrupt and looking to borrow more money, the lender is going to want to know that you have permission from the folks who handled your bankruptcy.

This topic isn’t a glamorous one, I know. But you, and millions like you, are in the dog house with the credit agencies right now. You still need transpo to get yourself here and there, and you need an opportunity to borrow some money so you can make payments and rebuild your credit. No credit check auto loans with repo are a great tool to get the process going.


Poor Credit Auto Loans


You have bad credit, but you need transportation and your current clunker just isn’t getting the job done. You need poor credit auto loans, and you probably have several questions on your mind. Hopefully this article gives you some insight. You’re wondering ‘how much can I qualify for?’ ‘what interest rate will I pay?’ and ‘will my current debt load be a factor?’

I’m sure you can understand why there’s no clear answer to these questions. Quite a few different factors determine how much a lender will offer you. They include:

a. How bad your credit really is, because there are varying degrees of ‘poor credit.’ Have you been through a divorce? Was it an injury or illness that caused you to miss loan payments and consequently damage your credit? Did you unexpectedly lose your job? If the circumstances surrounding your drop in credit status were beyond your control, some lenders may be able to offer you auto loans for poor credit with special circumstances. After all, they’re going to treat you differently who just stopped making payments because they bought more car than they could afford, for example.

b. Your stable gross income, especially as it compares to your credit rating. If you earn a lot of money (say $75,000 per year or more), and you have bad credit, your chances are going to be better than if you have bad credit and low income. The higher your income, the less your credit matters. Lower income, the more your credit matters.

c. The total amount of your other debt, as well as your monthly payments. Most borrowers are accustomed to having lenders look at the new loan payment in addition to their existing payments, considering the total as a percentage of your income. If you total loan payments are more than 25% to 33% of your monthly income, and you already have poor credit, getting an auto loan will be tough.

Auto loans for poor credit are tricky business, but if you persist and shop several loan providers, you’ll get the loan you need to buy the car you want.