Some people are interested to get an auto loan but have a bad credit. If you have a bad credit record, this could affect your chances in getting an auto loan. Do not be frustrated, because provided you meet some criteria, auto loans for those with poor credit can still be obtained. Here are some information about this kind of loan and some guidelines on how to obtain one.
Let us answer the question first on what is this auto loan for bad credit. An auto loan for bad credit is for people who cannot secure a loan through the conventional means.
The criteria for you to be able to obtain a bad credit auto loan are that you should have a low credit score, have filed bankruptcy, you have a low income level, no funds to pay down payment for a car, and had a history of a car repossession in the past.
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However, know also that getting a bad credit auto loan would be disapprove if you do not have a job that is permanent and only a part time one, if you cannot present proof of income, and if you had repossession lately.
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There are basic qualifiers for you to get a bad credit auto loan, and these are that you must be at least 18 years of age, have a $1,500 minimum monthly income, at present residing in the U.S. and are a citizen, and you have employed full time with a fixed salary that can cover payment for the loan term. Other requirements would be a working phone number and proof of residency that can be presented using a utility bill or a credit card statement.
A proof of income is usually asked in getting a poor credit auto loan depending on circumstances. Example of your proof of income would be your payment stub and your previous tax return so the lender can validate. For those who are self employed, you are still asked for a proof of income and you can do this by gathering your tax returns at least in the past three years, and this can be done by getting a professional tax preparer showing a form with profits you made.
Usually, in assisting funding for a car loan, dealers will look at the age of the car, and their cut off is seven years old.
It is advisable to get your bad credit auto loan through a franchised dealer because of the high standards they uphold. Usually, once the loans are funded by these franchisers, they assign it to a finance company. Be advised that purchasing your car from a car dealer with a buy here/pay here arrangement, the service of your loan will be through a third party payment processor.