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Now that you know the type of car you want to buy and you know how much your budget says you can afford for a car, it is time to apply for your financing. Rather than get your financing like everyone else does – through the car dealer – we recommend that you get your financing on your own, BEFORE you go to or contact the dealer.
It is important to remember that one of the four ways a car dealer makes money off of you is through their Financing Programs. The dealer wants you to finance your car loan – AT THE DEALERSHIP! They don’t want you to get your loan elsewhere or they potentially lose money. Therefore, one of the many ways to save money on your car purchase is to get your financing separate from the dealer – on your own!
Your choices include getting your financing at your local bank or credit union or you can apply for Financing Online – just as you are getting your initial car prices online.
Some of the many benefits of getting your auto loan online include -
- If you have good credit you can get a low interest rate and there are no application fees. With poor credit or no credit your rate will be higher.
- Online new car financing avoids the stress of the potential auto loan scams you may encounter and the un-needed frustration of having to deal with financing through the car dealer.
- Your Auto Loan approval notification is usually within 1–2 hours. That’s right anyone can get approved regardless of your credit.
- No hidden fees, points or prepayment penalties.
- Online auto loan rates from our researched sites can be lower than what you can get at the dealer or your bank.
- Once approved, in most cases your interest rate is guaranteed for 60 days which gives you plenty of time to go shopping.
- Online new car lenders overnight your check to arrive the next day, so you may shop as if you were a cash shopper!
By getting you financing online this takes away one of the major bargaining points from the dealer. Our mission is to save you money so it is recommended that you negotiate for the price of your car separate from the financing issue. Get your financing done BEFORE you go into the dealer and you are one big step ahead of the average car buyer.
Remember, by going through online financing sites there is no application fee and no down payment – two great advantages to you. However, keep in mind that we highly recommend you are able to make a down payment – preferably in the 20% range. When financing, to maintain a strong financial position, it is always recommended that the car you own be worth MORE than the total amount you owe to the bank, not the other way around and the way to guarantee that is to make a down payment of at least 20%.
By getting online approval, once you know your pre-approved interest rate you can compare this to what the dealer can offer. If you are open to letting the dealer finance your car, do not let them pull your credit report, simply tell them what your score is and ask them the approximate rate they can get you. If they can’t tell you, then don’t bother with their financing – stick to your own.
In most cases your rate online will be lower than what the dealer can offer to you. When talking financing with the dealer NEVER talk monthly payment only talk INTEREST RATE. If they can beat your interest rate go for it – if not stay clear. They will try to play games with you – just have the attitude that you have no time for games.
The important point is that in most cases it is in your best interest to get you car loan away from the dealer. Whether it’s at your local bank or online you need to have your financing taken care of BEFORE you go to the dealer and you’ll be on your way to saving big money on your car purchase and bigger money over the course of your loan.
We have researched the best available online options for your financing and have several very reputable sites for you to visit. Online financing is easy and safe. Fill in the required information and submit your application. Within minutes to 24 hours you will receive your approval notification. You will be told how much you were approved for and what your interest rate will be. At that time, you’re under no obligation to accept this offer and your rate will be guaranteed for the next 30 – 60 days.
What you do have is pre-approval for a certain amount of money – which means you can go car shopping without any concern or negotiation necessary, with regards to financing or how you will pay for your car. You can concentrate just on the price of the car. Good Luck!
No Credit/Bad Credit Auto Financing –
If your Credit Score is BELOW 600 – You can still get financing but you first need to understand the term that defines your situation. You would be what they call a subprime borrower – this is a borrower with poor credit or no credit. Each lender has its own definition of what makes up a subprime borrower, but typically, a credit score of less than 600 lands you in this category. You will find that the standard minimum requirements to obtain a loan may include the following –
- For those with no credit rating, at least one year at the same employer.
- If you have bad credit it is very important to go at least 6-8 months with no credit problems – this will greatly help you.
- At least two years of employment history for those with some kind of credit history.
- Minimum monthly gross income of $1500.00.
- Money down may be required, but is not necessary in every case.
- No repossession within the last 12 months unless included in a bankruptcy.
- Must reside in the United States.
The good news is that there are many lenders specializing in subprime loans that are eager and willing to loan money to those with bad credit or no credit. There is however, a catch. The interest rates for subprime borrowers are mostly quite high – much higher than those paid by their consumers with better credit.
Many times young people who want to purchase a new or used car are just starting out. They have no credit or the credit they have is shaky – what to do? Rest assured every one can buy a car – not just those with good or perfect credit.
Now that you understand what you’re up against, how can you get a decent interest rate? Here are a few suggestions – which you may have already done.
- Check your credit report. Make sure that everything on your report is accurate. If you do find information on your report that is inaccurate, you need to address it right away. Contact the credit bureaus in writing, listing your name and address and clearly detailing the nature of the error.
- Know your credit score. Your score is available online from each of the three credit bureaus. If you've got bad credit, it's helpful to know it before you go further.
- Don't finance through the dealer. This is a big profit center for them, any loan that they're able to get you is likely to wind up being more costly than if you had contacted the lending institution on your own. Ideally, you want to secure your auto loan before setting foot inside the dealership.
- Include your bank in your search - Many banks have entire departments dedicated to providing loans to people with bad credit and they tend to look more favorably upon current customers. Your credit union is also a good place to try.
- Determine how much you want to pay monthly – You should have in mind how much you can comfortably afford for your car, for both a down payment and monthly payments. Do not tell this amount to the car dealer – they will use this information to attempt to trick you into a higher overall price. You can use this car loan calculator to help you crunch the numbers for your bad credit car loan.
- Prepare your documentation – Whether online or in person at your bank, you may need to provide some proof of employment and income. It’s helpful to have access to this documentation, such as pay stubs etc. This will speed up the process of getting your bad credit car loan.
- Remember you CAN help your credit score - When it comes to your credit history – you have control. You can improve your bad credit by paying your bills on time and not overextending yourself when it comes to loans and credit cards. With the proper attention paid to your credit, you could change your credit situation yourself within two to three years. You may have to pay more than you'd like for the auto loan you're about to receive, but in six months to a couple of years you may be able to refinance your loan at a much lower rate.
You have a lot of company because most cars sold are sold with subprime financing – credit scores less than 600. Carthority.com has researched different lending companies and has found several that are leaders in the industry
Once you are approved from one of these institutions you can forget all about any credit problems you have or have had in the past. You can once again establish your good credit and make sure that you maintain an excellent credit standing. As a suggestion, after paying on your loan for 6 months without ever being late – and I mean not late – not by one day - you can then apply to have your loan refinanced at a lower rate. If you get a lower rate than what the dealer can offer to you – then you have once again saved MORE money on your car purchase. Here are a few additional suggestions to ease the situation for those with bad credit or no credit.
- There's only one way to restore bad credit and that’s to pay your bills.
- Transfer your card balances with high interest rates to your lowest interest card.
- Pay off or pay down your debt BEFORE you buy a car.
- If you have credit cards with high balances pay more money to the cards with the high interest rates and be sure to send more than just the minimum payment.
- Lastly if your credit is bad and you are in debt you MUST simply stop spending. It really can be as easy as that! Use your money – the money you keep spending - to pay down or off your debts – you are then on your way to a sound financial footing.
We have researched the best available online options for your financing and have several very reputable sites for you to visit offering you decent interest rates while giving you the ability to buy a car and at the same time establish your good credit rating. Read the review of each and choose the one or two you are most comfortable with. It is not in your best interest to apply to all of them – the more you apply the lower your score. So pick 1 or 2 sites and work exclusively with them. All of these sites will be able to help you. Good Luck!
Do you need some more assistance? We can help you. Be sure to get and download “Secrets to Car Buying”. Order the Self Service option (my 121 page Car Buying Guide with my money making 10 Step Car Buying Process) for a more detailed explanation about online financing for no credit and bad credit auto loans and how this effects your car purchase including hundreds of tips on how to pay the lowest price you can for your new or used car or simply sign up for the Full Service option and we will personally assist you through the entire process and help you save big money
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