Bad Credit Used Car Financing

Bad Credit Used Car Financing

Bad Credit Used Car Financing

The price of a new car is often too high for a good number of people to purchase, so they will seek instead to buy a used car. But, as few people have the money in hand for even a used car purchase, so they will need some kind of used car financing. You should be aware that it will be almost, if not completely, impossible to get a loan for a car that is older than 5 years. The chance that the car will suffer mechanical failure is just too great. If the car dies, there is a greater chance that the person will just walk away from the loan.

Financing for used cars is offered from a number of sources, and most people, whatever their credit rating will be able to find a loan for their used car. Many used car dealerships will offer a financing program, but if the dealership you will be using does not, you can apply at a bank, finance company, or credit union. If you are buying a car privately, the seller will sometimes allow you to make payments to them, rather than pay the full amount at once.

When you need used car financing, you should have a good idea of just how much you will be able to spend on the car. You should consider how much you will be able to afford for the monthly payments without putting a strain on your lifestyle. Most financial institutions will issue you a loan before you get the car. This is referred to as a pre-approved loan. It will have a ceiling amount that will allow you to buy a used car up to the limit of the loan. It is wisest to approach the loan source with up to date information about your credit rating, employment, outstanding bills, and anything else that might influence their decision.

Make sure that when you are looking for used car financing that you do not depend on the quotes given by any one loan company or bank. Take the time to check the rates and terms offered by several companies, it may well save you quite a bit of money.

If your credit rating is on the low side, you can expect to pay a higher rate of interest than someone who has a good credit rating. It does seem strange that financial institutions make it more difficult for someone who may be having money problems to pay off their loan, but that is just the way they do business.

Try to keep the pay-back period for the loan as short as is comfortably possible. The longer the loan is issued for, the more you will pay in interest. Being able to put a fairly large down payment on the used car can also help you to get used car financing more easily, and keep your interest rate lower.

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