Car financing seems to be a tedious task for many, let alone for someone with a not so good credit history, or worse, a bad one.
There are bad credit scenarios where a person fails to pay off the loan instalment for various reasons — ranging from an emergency to fatal illness. Additionally, there are cases of bad debt where the borrower has a repeated case of loan default or bankruptcies and multiple repossessions in his/her credit history.
In any case, people with bad credit history are in need for car financing too. Fortunately, there are lenders which function exclusively for the cases of bad credit history.
On-the-lot financing is gaining momentum as people go forth with their desire to acquire car finance despite their poor credit score. And not only that, the dealers providing this in-house finance service have their own set of terms and conditions as well as interest rates for the cars they agree to finance.
The idea is simple; the borrower gets the advantage of the instalment package, which is designed keeping in view the financial information of the borrower. This helps the borrower acquire the desired vehicle at instalments which aren’t as high as those of other financing options, nor are the interest rates as steep.
Also, there are a few things even the people with bad credit need to show in order to get their car finance approved:
- Income: Though one would be having a bad credit history with stinky bankruptcies and rotten accounts earlier, it is essential to have a steady source of income (monthly W-2 at least) for timely repayment of the loan.
- Vehicle Repossessions: Since the lender is already risking his investments by providing car finance to someone with a bad credit history, it is essential to provide information about vehicle repossessions as that would help them determine if a person is bankrupt or not (a repossession within 12 month span means bankruptcy) on the basis of which loan would be sanctioned.
- Employment: the status of employment is another of the basic factors a lending dealer would keep in consideration since it is essential for the in-house financer to know whether they’d be receiving payments on time or would be another case of bad credit.
Some of the lenders with readily available car finance packages for people with bad credits are:
Its not difficult to get a car loan on damaged credit, however, it is important to understand your requirements so you can choose the right lender. It is important to remember that the people with bad credit applying for car finance would be under higher scrutiny by the car financing dealers and would be expected to go for down payments based on their package, provide income validation documentations as well as proofs needed for a stable employment source.
These companies and dealerships offer easy terms and conditions for people with bad credit with their subprime loan options and not only does that make it an affordable choice for people to acquire cars of their dreams, it also helps them get a chance to start anew with their credit history.