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A Little Known Secret in the Car Business About Bad Credit Auto Finance

March 25, 2012 Posted by bad

Bad credit is really frustrating. What’s even more frustrating is the feeling and the awareness that a car dealer or loan company seems to be taking advantage of you past problems and need to get approved for your loan. You know you can make the payments, if you can just get that loan approved. You don’t want to drive an old car, you want something dependable that looks good. If only you could erase those mistakes on your credit bureau and start fresh.

Well, getting a new credit bureau isn’t going to happen.

You can however, avoid the whole circus of dealing with dealer finance departments altogether. By using this little known secret, you can get approved easier, get approved for more car, have lower payments, eliminate the need for a down payment and of course, a lower interest rate.

You probably have no idea of this… car dealerships mark up the interest rate on a loan to make more money. Just like they can mark a car up a few thousand dollars to make a profit, they can increase the amount that you pay in finance charges even more. The extra money that they get you to pay in higher payments and a higher interest rate is profit for them and less money you get to keep each month. It doesn’t sound fair, does it? It is the truth though.

Let’s say you get approved for a car loan at 10%. That’s a reasonable rate if you have credit problems. What isn’t reasonable is when the dealer sees your desperation to get approved and tells you that, instead of 10%, your rate will be 15%. That extra 5% is an easy sale for a car dealer and results in quick profits for them, higher payments for you.

The way to get a lower rate, lower payments and a no down payment car loan for bad credit is to deal with a company directly that finances cars for people with bad credit. A company that will help you, not hurt you, and look out for your best interests.

http://MyCreditTree.Net is a recommended loan site that will help you get into the car you want with no money down and a much lower interest rate than dealership arranged financing.

Jason Lanier is an EzineArticles.com expert author.

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Good News About Bad Credit Car Loans

March 13, 2012 Posted by bad

Almost half of all car purchases in America are financed. Couple this with that fact that 30 million Americans have credit problems and you see why there’s such an interest in bad credit car loans.

While carrying higher interest rates than prime loans, bad credit car loans are not hard to get. Even people who have filed for bankruptcy can find a decent deal on auto financing if they shop around. It doesn’t matter if they buy new or used.

Bad Credit Car Loans – Buying New

For peace of mind, safety and hassle-free driving, there’s nothing like buying a new car. When you buy new, you have more control over optional features than if you buy a pre-owned vehicle. You will also get a new warranty that lasts much longer than the extended warranty you can buy for used cars.

The danger in buying new is getting “upside down” on the bad credit car loan. One way to avoid this is to have a decent down payment–20% or better. Another way is to choose a vehicle with high resale value. This will help slow down depreciation.

Depreciation is the difference between the Manufacturer’s Suggested Retail Price (MSRP) when you bought the vehicle and what it’s now worth. A $25,000 car will depreciate an average of 15% the first year and between 7% and 10% annually for the next two years. Cars with a prestigious nameplate hold their value longer and are less likely to depreciate faster than the car loan.

Bad Credit Car Loans – Buying Used

Buying a used vehicle makes sense if you want to keep your monthly payments affordable. Since used cars depreciate slower than new cars, they make better short-term collateral for lenders. However, some lenders will decrease the loan’s term and increase the rate on bad credit car loans.

When you buy used, you have the chance to get a more expensive model than you could afford if you bought it new. For about the same amount, you could own a new Hyundai, a two-year-old Taurus, or a six-year-old BMW.

Getting a used vehicle from a private party will be cheaper than buying the same car from a dealership. Here are a few questions you’ll want to ask the seller:

- How long have you owned the vehicle?

- Has the vehicle been in an accident or repainted?

- When are the next state inspection and emissions tests due?

- How often has the oil and filter been changed?

- Why are you selling the vehicle?

First Things First

With the ease of the online application process at sites like http://www.buyaauto.com, you can pre-qualify for a bad credit car loan before you start shopping for a vehicle. Make sure to borrow enough money to cover all the costs associated with the purchase such as dealer prep charges, if you are buying new, license plates, title and registration fees, etc.

Remember that total price is more important than the monthly payment. Stretching the length of a bad credit car loan will mean paying more interest. For instance, the payments on a $20,000 loan can be lowered from $500 a month to $360 by extending the term from 48 months to 72 months. However, this will cost about $2,000 more over the life of the loan, or 10 percent of the loan amount.

Mike Hamel is the author of several books and the Senior Writer for AIM Techs, an Internet marketing company that specializes in advanced SEM techniques and developing sites like BuyAAuto.

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A Bad Credit Rating? What to Do About It

March 12, 2012 Posted by bad

Something that many individuals with bad credit have in common is that they do nothing about it. They accept that they have bad credit and live with the consequences. Many don’t realize that it is actually not that difficult to fix a credit score. It does take patience as it can take a year, or many years depending on how bad your score is, but it is possible. The key is taking action and being consistent. The following are steps that you can take to improve your credit rating.

- Request your credit report. In Canada this means contacting Equifax Canada and TransUnion Canada. In the US this means contacting Experian, TransUnion, and Equifax. Many people are unaware that a poor credit rating could be due to clerical errors. Typos and duplicate entries on a credit report are not uncommon. Once you have your reports, review them closely to ensure that there are no errors. If there are errors, dispute the charges with the reporting agency and you could be back to an acceptable credit rating sooner than you think.

If you have established that your credit report is accurate, and would like to improve it, the following should be your next steps:

- Pay all of your bills on time. If you can’t pay the bills on time, call the company(s) you will be late in paying and let them know when you will be paying. Some companies will note these calls in your customer file and it may prevent them from reporting a non-payment. This will not always work, but it’s worth a try.

- Don’t cut up your credit cards. Many think that if they don’t use credit for a while their score will be fixed and this is not the case. You must use credit to gain credit. Reduce the amount of available credit on each card and reduce the number of cards you carry. Don’t just cut up a card, but call to have the account closed. Call or write to your credit card companies and ask them to reduce your interest rate. Paying a yearly fee for a lower interest rate on a card on which you carry a balance may be well worth it in the end. Again, if at all possible, be sure to pay your bills on time.

- If you have no cards, try to obtain a secured loan, or a secured credit card to re-establish your credit. Asking a friend or family member to co-sign on a loan or credit card is another method, but beware, if you don’t pay this debt, you may lose a lot more than a good credit score, so this should be a last resort.

Fixing your credit score is not impossible, but it does take patience, persistence and commitment. Following these steps should help you to improve your credit rating.

Molly Wider is a Loan Officer at BHM Financial Group. To find out more about car repair financing and car-title loans, visit http://www.bhmfinancial.com

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Three Things You Must Know About Bad Credit, Car Loans

March 10, 2012 Posted by bad

People need cars to be able to move from place to place. At some point in our lives, we will need a car even if we have never had one before, which means that we will go looking for an auto loan. If you are thinking of how you will be able to get a car loan with bad credit or whether it is even possible; Yes it is possible to get a car loan and there are three things you need to know about bad credit car loan:

It does not matter how bad your credit is, you can get an auto loan. Many people in recent times are having financial problems due to economic conditions and massive layoffs. Most lenders understand this and are willing to lend to such individuals. Though these loans may require down payments and command high interest rates, you can still negotiate your way to a reasonable rate.

The downside to bad credit, car loans is that the interest rate is usually very high. The interest rate will be based on your credit score, your ability to repay, your debt to income ratio and other risk associated with lending you money. Most of the lenders will also require a huge down payment to offset the loan in case you default. if you decide to go with a lender who does not require a down payment, be well aware that the interest rate will be overly high.

A lot of car dealers are specialist at making loans to bad credit individuals. While most dealers understand people’s financial situation, some use that situation to exploit individuals. Don’t allow a car dealer to con you into getting a loan that bears no value to the price of the car. Make sure you shop around and you will definitely get the bad credit auto loan you need.

For more tips and resources on car loans visit Financing For Car We Will give you tips to find the best Auto Loan Rates

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Be Informed About Personal Loans for People With Bad Credit

March 9, 2012 Posted by bad

Knowledge is power, so they say. Meaning, you cannot be effective in everything you do if you know nothing about it. Taking out a loan is not an exception. If your brain is confined to the knowledge that only people with good credit rating can take out a loan and so you sulk in the corner about you bad credit rating then it’s time to upgrade your knowledge. Nowadays, personal loans for people with bad credit do exist and the more you know about this loan, the better.

Personal loans are unsecured loans that can be used by the borrower for any purpose. This means that the lender will never ask you about the purpose of your borrowing. Thus, you can use the money in anything; may it be something urgent and would need immediate attention like medications and car repair, something that can wait some time like home renovations and improvements or something that is not really that important like splurging in shopping and a luxurious vacation.

Since these loans are unsecured, the lender will not ask you to make any of your current assets or properties as collateral to the loan. You need not worry about your car or your house at risk of repossession by the lender in case you need to default the loan. But since you have a bad credit rating, the lender will have to ask you for a co-signer – someone whose credit rating is good and whose job and source of income is stable. This co-signer will have to shoulder your financial obligations once you default on the loan.

With so many financial risks that the lender has to cover for bad credit loans guaranteed approval, it is then expected that they “get back” by charging very high interest rates. Not only will this protect the lender’s money but will also ensure a return of investment. Therefore, if your purpose in taking the loan out falls in to the category of “can wait” or “not that important”, you may want to rethink your decision in borrowing money for that purpose. It is highly recommended that you work on restoring your credit rating first. After which, you can then take out a loan, enjoying a regular interest rate.

Ryan has been a coffee lover and drinker for many years and enjoys writing about his experiences with Bad Credit Loans. He also likes to pass on useful information of how to get the best out your coffee machine and new brewing techniques to his friends and readers on his website Mighty Bean Coffee.

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