Month: October 2017

If you have subpar credit finding a traditional lender to approve your car loan application, without high interest rates, can be frustrating and time consuming.

Banks, credit unions and Buy Here Pay Here lots are not your only financing option. You can search and apply for a bad credit auto loan online. While this might be the answer you needed, there are a few things you should know before you “sign on the dotted line”.

What are Online Car Loans?

An online automobile loan is similar to one you get from a traditional lender. The main difference is that everything is usually handled from your computer. The same information is still required with your loan application,

• Valid driver’s license
• Proof of income and residence
• Current utility bill
• Credit history

You might also be required to show proof of insurance. The lender you are applying with will provide you with a complete list of the necessary documents. The advantage to having this information before you start, is it can speed up the answer from the online lender.

Advantages of Internet Auto Loans

There are several advantages to applying for a vehicle loan online that include not having to leave your house. This means that you don’t have to haggle over interest rates and fees with a banker or auto dealer or face being turned down in person.

If your loan application is rejected due to your poor FICO score, it is a little less embarrassing online than in person.

Some of the other benefits of shopping online for a bad credit auto loan include,

• Easy to get multiple quotes. Instead of visiting or calling several lenders to compare financing options, you can see multiple companies online at once. Take a couple of hours to fill out and submit the short forms, and soon you’ll receive the lenders answers and offers. Shopping around will help ensure you get the best interest rate, in spite of your bad credit.
• Helpful tools. If your credit is less than perfect or you’re not sure what you can afford, many internet auto loan companies have helpful tools and information on their websites. You can find details about specific bad credit vehicle loans, along with tools that will help you create a budget. See, before you buy, exactly what you can afford so your credit doesn’t take a ding when the auto loan payments are too high.
• Access to auto loan brokers. An auto loan broker is essentially a third party that works to connect drivers with potential lenders. They do not approve loan applications, only connect you with the best financial companies depending on your resources. They can save you a lot of time, searching for lenders yourself, and have the experience and connections that consumers often don’t have. Applying with the right lenders will increase your chances for approval.
• Potentially lower interest rates. This may be the best benefit to internet auto loans. Even if you have bad credit, you still have a good chance of securing a vehicle loan with lower interest rates than you typically get from traditional lenders. This doesn’t mean that you a guaranteed a great rate, only that your chances are significantly improved. This is also why it is important to shop around and compare multiple quotes.

Disadvantages of Online Vehicle Loans

While getting your vehicle loan online does have its advantages, there are a few disadvantages that you should be aware of.

• Can be difficult to get additional information. If the information you’re looking for isn’t on the site, contacting some potential online lending companies can be difficult. It also might not get any easier after you’ve signed the loan contract. If problems do arise, it can damage your credit and lead to other financial issues.
• Provide personal information. When you apply for a vehicle loan online, you will be required to submit some personal information. With the increase in data breaches, even with a credit reporting agency, this should cause you some concern.
• Could be a potential scam. If you do your research and don’t provide your financial information to every internet lending site you land on, you’re chances of being caught in a scam are relatively low. Going through an online auto loan broker can also help you avoid potential scams. You do need to be cautious and read the fine print, before submitting any information. Unfortunately, there are some online lending companies that will sell your data to other businesses.

Get a Vehicle with an Internet Auto Loan

Bad FICO scores and thin credit histories don’t necessarily mean that you can’t get a low interest car loan. It also doesn’t have to be harder to get approved, if you explore all your options. This includes looking online.

Do your homework and read all the details before providing any personal information. Wait until you have multiple offers, before filing out the loan forms. This way, not only are your protecting yourself from fraud and scammers but also ensuring that you get the best interest rate possible. When in doubt, don’t be afraid to go through a third-party auto loan broker.

Your vehicle was just repossessed. Now you’re wondering if you’ll be able to get financing again. You’ll be glad to know that the answer is often “yes”.

Even with a vehicle repossession, you might still be able to get a bad credit auto loan.

There are some steps you can take that will not only get you started towards improving your FICO score, but also put you back in the driver’s seat again.

9 Tips on Getting Financing After a Repossession

Before you sink into despair, bemoaning the loss of your vehicle and wondering how you’ll ever be able to get approval, there are a few things you can do. Thankfully, many financial institutions and bad credit auto dealers are willing to work with consumers that have a less than perfect FICO score and this should give you some relief that the situation is not hopeless.

1. Find out why the vehicle was repossessed.

Missed payments are the most common reasons for vehicle repossessions, but it’s not the only one. If you’ve made every payment on time, and your car was stilled towed away, it is important that you call the lender immediately. Some leasing agreements require that you carry a certain amount of insurance on the vehicle. Failure to do so can result in repossession.

2. Ask if you can get the car back.

Banks, credit unions and even Buy Here Pay Here lots do not want to lose money on vehicle loans. This is good news for you, since they are often willing to work with their lenders. If you’ve lost your vehicle due to lack of insurance, it is easier to get it back. Usually, all that’s necessary if for you to show proof of insurance and pay a fee.

In some scenarios, you will be required to repay the auto loan in full. There will also be repossession charges. BHPH dealerships will often reinstate the terms of the original loan, but the repossession often stays on your credit report. The new payments will also be reflected in your credit history, which can negate some of the damage a repossession can have on your score.

Before you start trying to get your vehicle back, there are a few questions you should think about.

• Will you be able to afford the fees, fines and monthly payments, along with the cost of insurance?
• Is public transportation or a car pool a viable option?
• Are you already thinking about declaring bankruptcy?

If you aren’t sure if you’ll be able to keep up with the payments and vehicle maintenance, it might be better to consider taking advantage of public transportation until you are financially stable. Declaring bankruptcy, before the automobile is auctioned off, can help you keep the car and work out a new payment plan. The downside to this is that a bankruptcy can stay on your credit report for several years.

3. Understand your rights.

A repo agent cannot damage your property when retrieving the vehicle. For example, if it is in a locked garage the structure cannot be damaged. You are also legally entitled to any personal property left in the vehicle. The lender cannot sell or keep it in an attempt to recoup some of the loan. This does not apply to any upgrades you may have installed on the vehicle. If you believe your rights have been violated in any way, your best course of action is to contact a consumer rights attorney.

4. Find out if you still owe after the vehicle is sold.

You might be surprised to learn that you can still owe on an auto loan, even after the vehicle has been sold at auction. This is especially true, if it was new when purchased. A deficient balance occurs when the amount the vehicle was auctioned off does not cover the remaining due on the loan in full. Failure to pay off your loan can send it to a collection agency, and this black mark will stay on your credit report for seven years.

5. Know your credit score.

When you’re ready to apply for financing for a vehicle, after a repossession, it is crucial that you know your credit score. Chances are it will be subprime, but you can still get approval for a bad credit car loan. Knowing your credit score ahead of time will prevent any unpleasant surprises. Just be prepared to pay higher interest rates on the loan.

6. Start repairing your credit immediately.

The first step is to request a copy of your credit history. You are entitled to one free credit report from each of the three credit bureaus annually. Carefully look over your history to determine what areas you can fix. Pay off any outstanding balances that are in collections, and try to refrain from accumulating any additional debt. If you do find an error, file a dispute with the bureau that issue that report.

7. Have a down payment.

Once there is a vehicle repossession on your credit report, you will probably be required to have a down payment for your next auto loan. This is usually standard for any vehicle loan approved for consumers with subpar credit. Not only will this dramatically improve your chances for approval, it might even help you get a loan with slightly lower interest rates.

8. Get all your paperwork together ahead of time.

When you have your documents ready, potential lenders tend to look more favorably on you. This is true, regardless of your credit score. Some of the paperwork banks and BHPH lots often require include,

• Valid driver’s license
• Proof of insurance
• Recent pay stub
• Utility bill (in your name)
• Federal tax return

9. Don’t purchase a vehicle you can’t afford.

It is important to think realistically, especially after a vehicle repossession. You don’t want to lose another car due to an inability to make the monthly payments.

Recovering From a Repossession is Possible

If you’re vehicle has been repossessed, it is possible to rebuild your credit and get approved for another car loan. You should expect to pay higher interest rates and have a down payment, but if you stay current with your new loan your credit will start to improve.