Getting Auto Loans with a Credit Score Below 500
Nowadays, owning a car is no longer a luxury. Most people feel that they need a car for everything from going to work to going shopping. Sometimes life can get quite difficult without a car to call your own. The only problem is that most of our credit scores have taken a serious bashing over the last few years and this has made it so much more difficult for us to get auto loans in Phoenix. If your credit score is below 500 as well, then this is the perfect article for you.
The first thing you should know is that your credit score is considered horribly low by most traditional lending institutions. Getting any form of credit from a bank is totally out of the question. The good news though is that there are quite a few bad credit auto loan lenders who will be more than willing to give you money. See http://www.autoloanphoenix.net for additional information.
Such lenders are most concerned with your ability to repay a loan than with your credit score. As you may already have guessed, they are used to dealing with people who have poor credit and are more than happy to repossess your car in case you fail to meet any repayment conditions. These lenders want complete details of your monthly income as well as details of any fixed expenses you may have before offering you a loan. They will only offer you a loan which they feel you will be able to repay with ease. That's why most people tend to include the income of their household when going for these loans instead of just their income alone.
As far as interest rates are concerned, be ready for a shock. You will not be paying anything near what regular borrowers are paying. These lenders believe that they are taking a huge risk by trusting you with their money and therefore deserve a much larger reward. There are a couple of things you can do to reduce this rate though. You could put a down payment against your car or you could find a co-signer with good credit. When you make a down payment, you will be paying interest on a lower value which will make the cost of the loan cheaper for you. And when you find a co-signer, it is his/her credit score that will be considered for the loan which gives you a chance of getting a loan which is almost as good as that which is offered to a regular borrower.
Apart from being able to own a car of your own, the biggest advantage of taking bad credit auto loans is that you get an opportunity to rebuild your credit score. All you have to do is ensure you make all your loan repayments in time and by the time you pay off your loan, you will have a much better credit score and will be eligible for much better loans. So what are you waiting for? Apply for a bad credit auto loan today.