Helpful facts for understanding
refinancing car loans with bad credit. credit unions
A Car Loan For People With Bad Credit
Most banks have strict policies about whom they will lend their money to and for what the money will be used. They will not grant you a car loan for a used car which is older than five years. They charge higher interest rates on loans for used cars than on loans for new cars. And very rarely do they grant loans to people who fall under the subprime category.
A person who is considered a subprime borrower is one who has a blemished credit history. He may not be paying his bills on time or he may overextend his credit card. A subprime borrower is usually someone who has a credit score below 620. If your loan application has been rejected on the grounds that you belong to this credit-unworthy group, does this mean that you cannot borrow anymore?
You may still get a car loan if you will look for lenders that grant financing to subprime borrowers. Avoid finance companies that advertise 1.9% interest**. Notice the sign (**)? Below the big ads, written in fine print, the ** means for prime borrowers only or for people with excellent credit. Clearly you do not belong to this worthy group. People with bad credit will have less privileges when getting a car loan. The interest rates are decidedly high. You may opt to search for online lenders. But there are measures you may take to improve your circumstances.
The first thing to avoid is to rely completely on the car dealer. He will always get a certain percentage out of car loan transactions. In fact, it will be advisable if you are able to secure a car loan before you allow a car dealer to be within a shouting distance from you. When you look for a credit grantor, dont accept the first one you encounter. Compare interest rates offered by lenders, but dont accept the average rates they give. A lender may offer a lower interest rate for a person with a credit score of 800 and a higher interest rate for someone with a score of 600. Ask for specific rates. You may also approach credit unions and banks where you have a current account.
You also have a chance to improve your category by checking your credit report and reforming your credit score. For example, there might be an error in the information found in your credit report. This error may have been the one responsible for the black mark on your credit history. You must immediately have this error corrected by informing the credit bureau in writing.
Credit scores can change. If you pay your bills on time and if you always stay within your budget, then your credit score will likely improve. Once you have a higher number, you may get a lower-rate refinancing for your car loan.
About The Author
Peter Garant is writing articles about bad credit for his credit repair kits blog http://creditrepairkits.blogspot.com/ and articles about car loans for his family finance site http://www.halds.com/category/car-loans/.
More Useful Resource and Updates on refinancing car loans with bad credit. credit unions
- Countrywide Agrees to $3.5B Mortgage Sttlement in California (KESQ Palm Springs)
Calabasas-based mortgage lender Countrywide has reached a settlement with 11 states designed to provide up to $8.68 billion in relief to borrowers, including $3.5 billion to Californians, Attorney General Jerry Brown announced Monday.
- Countrywide Deal Brings $1 Billion Relief For Fla. (CBS4 Miami)
Florida homeowners could get up to $1 billion in breaks from high mortgage costs under a multi-state deal announced Monday afternoon with Countrywide, one of the nation's largest mortgage companies and now part of Bank of America. Nationwide, homeowners could get more than $8 billion in relief.
- BofA settlement could keep thousands of Floridians from losing their homes (South Florida Business Journal)
As many as 57,000 Floridians who face foreclosure could be allowed to keep their homes under a settlement agreement reached with Bank of America, Florida Attorney General Bill McCollum said Monday.
- Countrywide Reaches Settlement to Provide Relief to Borrowers (FOX 11 News Los Angeles)
Calabasas-based mortgage lender Countrywide has reached a settlement with 11 states designed to provide up to $8.68 billion in relief to borrowers, including $3.5 billion to Californians, Attorney General Jerry Brown announced Monday. "With this settlement, homeowners will receive direct relief from the catastrophic damage caused by Countrywide," Brown said in a statement released early Monday ...
- Countrywide to pay $10M for bad loans (Detroit News)
More than $9.8 million will be paid to assist Michigan homeowners who have lost their homes to foreclosure and nearly 10,000 residents will be able to refinance their mortgages at lower rates.
- Countrywide Settlement Could Help Mortgage Holders (Channel 8 San Diego)
City Attorney Michael Aguirre said today he intends file additional litigation against subprime mortgage lenders in an effort to halt further foreclosures in San Diego.
- Loan-modification program could help Countrywide customers avoid foreclosure (Fort Worth Star-Telegram)
Homeowners would be able to refinance to lower mortgage payments.
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