Getting an auto loan if you have a bad credit

Many people looking an auto loan surf the internet looking for what they need. While surfing they can not miss the huge number of advertisements that are served to them. These advertisements advertise auto loan options. Most of them are honest about their bad credit auto loan options. If you are one of those people looking for a bad credit auto loan, you should be aware that there are things that could not be acceptable for you.

Both people with bad credit and people with good credit need an auto loan. But the conditions are not equal for both of these groups of auto loan seekers. It’s much harder to get a auto loan if you have a bad credit. The creditor demand more of a down payment from someone with a bad credit. Someone with bad credit is expected to pay higher interest rate for auto loan. Further more, some creditors don’t even give a loan to someone with bad credit. Someone’s credit can determine the down payment range from 20 – 50 %, and interest rate in the range 5 – 26 %, and length of the loan somewhere between 2 -4 years.

A very bad situations in bad credit loans appear when the price of the car is greatly increased by the car dealers for no reason. Car dealers dealing with bad credit loans will increase the value of car from $6000 that would be her real value to somewhere around $9000, request $3000 down payment provide financing for 20 % interest or more. When something like this happens to you, you will be indebted to the auto loan company for a price more that it’s real value. If you want to avoid this you should first research for the real value of the car you wish to buy and pay only about $300 – 600 over the real price.

The appearance of internet has giving rise to two different way of selling and buying cars. The first way enables people with bad credit to get acceptable car loan. What they do is look at the car they are interested in on a website and provide answer to some questions, and afterwards the informations gathered are passed on to a car dealer who deals with bad credit auto loans. This way of getting auto loan is known as “dealer network system”. The downside of “dealer network system” is the fact you can not check on dealers you plan to do business with.

The other way is know as application service. Application service works the way that someone with a bad credit applies for a loan online and the information is then sent to many different car dealers simultaneously. The good thing about application service is that the car dealers compete with each other by lowering price and other conditions so the person with a bad credit can get a decent auto loan.