Auto Loans for Bad Credit
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Bad Credit Car Loans
Auto loans for bad credit are what they sound like. Lenders usually have requirements borrowers need to meet, one of those being credit score. If you have bad credit, you will need to find a lender that you meet the requirements for. Most lenders will consider income and other factors too such as down payment or the equity position in the vehicle.
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How To Get Auto Loans for Bad Credit
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Helping You Find Auto Loans for Bad Credit
Finding an auto loan for bad credit will require some due diligence. While you want to shop around, you want to be mindful that having your credit pulled can impact your score. To find the best auto loan, it can be helpful to narrow down a few vehicles that you want to purchase. Once you have a few real options on the table, you can work with a lender or dealership to obtain the financing you need.
Auto Loans for Bad Credit: Frequently Asked Questions
How do auto loans for bad credit work?
Secured auto loans use the vehicle being financed as collateral. While the borrower can get prequalified, the vehicle will need to meet the criteria. Criteria can include loan to value ratio, year model, price, and more. In some cases, the borrower will need to offer up a down payment in order to meet the criteria. There are two steps to getting an auto loan; the first getting prequalified and the second finding the right car. Once you’ve sealed the deal, you can enjoy fixed monthly payments over a set period of time.
Are auto loans for bad credit worth it?
With transportation being a necessity, auto loans for bad credit can be worth it. While they may cost more and be harder to qualify for, if handled as promised, an auto loan can boost your credit. You will need to consider all aspects and pros and cons associated with a bad credit auto loan to determine if it’s worth it for you.
Compare & Shop Auto Loans for Bad Credit at Acorn Finance
We rely on transportation to get us where we need and want to go on a daily basis. When it comes to getting an auto loan with bad credit, you may feel like you are at the longest red light ever. While loan costs may be higher, and requirements more strict, some lenders specialize in helping subprime borrowers. Here is what you should know about auto loans for bad credit.
Learn More About Bad Credit Car Loans:
What is the lowest credit score to finance a car?
When it comes to auto loans, there are several factors that can determine eligibility. While some lenders may have a minimum credit score requirements, most lenders prefer to look at the total deal to determine if it’s worth it. As an example, if you have bad credit, but are using a $5,000 down payment, the lender may have a good equity position in the car. Therefore, if you default, they will likely be able to recoup funds. As a result, they may be more willing to approve the loan, regardless of credit score. We encourage borrowers to check credit before applying for a loan to identify ways to improve their score. The better your score, the better your chance of approval.
How hard is it to get a car loan with a 500 credit score?
Getting an auto loan with a 500 credit score may be hard, or it may not be. As we’ve mentioned, there are several factors that come into play when it comes to approving auto loans. While a 500 credit score is bad, there may be ways to increase your chance of approval such as a down payment or cosigner.
What credit score do you need to get a $30,000 car loan?
To qualify for a $30,000 auto loan, you will need sufficient income and a decent credit score, amongst other requirements. Some lenders will want to see a credit score higher than 660 for a loan of this amount, but requirements can vary.
Why choose Acorn Finance for bad credit auto loans?
Acorn Finance offers a platform that allows consumers to explore personal loan options from top national lenders. Our platform puts the borrower in the driver seat as lenders compete for their business. While a personal loan is not always the first choice for financing a car, there are some situations where it’s preferred. Inexpensive or older vehicles may not qualify for traditional auto loans. Therefore, a personal loan may be a viable option for financing. Personal loans can also be used to come up with cash for down payments.
How to apply for bad credit auto loans:
#1. Check your credit score
Checking your credit score can allow you to start the process with realistic expectations. Additionally it can provide an opportunity for you to identify ways to improve your score.
#2. Review finances and set a budget
From down payment to monthly payment, review your finances to determine what you can afford.
#3. Get prequalified
Getting prequalified for an auto loan can help you further define your budget and search criteria. It also provides the opportunity to review other offers along the way. Visit a local licensed dealer that offers financing or bank or credit union to get prequalified. If you wish to use a personal loan, you can get prequalified at Acorn Finance with no credit impact.
#4. Purchase vehicle
Once you are prequalified, you can start the fun part - finding your new car. With a budget and criteria in place you can identify just the right vehicle faster.
Keep the wheels in motion with an auto loan for bad credit. If you opt for an inexpensive vehicle or older vehicle, a personal loan may provide the funds you need. If you opt for a newer vehicle or one through a licensed dealer, they may have financing options available. While banks and credit unions can also offer auto loans for bad credit, requirements can be more strict. Check personal loan offers for bad credit at Acorn Finance today!
Pros & Cons of Auto Loans for Bad Credit:
Pros
- Opportunity to build credit
- Purchase a vehicle with fixed monthly payments
- Expand your selection of vehicles you can afford
- Fast approval
Cons
- High costs of borrowing
- Strict requirements
- Down payment may be required
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