Your First Car Loan Will Help You to Build Your Credit Score

Buying your first car is an exciting experience. But, to buy your first car, you need to apply for your first car loan. And for getting the loan, you need a good credit score. But, what if you have zero credit score? Don’t worry. You can approach the lenders who help first time buyers. With the help of a specialized lender, you can buy your first car. And, by making timely payments, your credit score will improve as well. It’s like killing two birds with one stone!

Car Shopping Tips for First Time Car Buyers

· Consider your Lifestyle

The car market is a vibrant market with several options. A different car is available for each income group. If you are confused about choosing a car, your lifestyle will help you in defining your car. Do you need a fuel-efficient vehicle or a vehicle that has backseat space for the kids? The choice remains with you.

· List down the Car Models

Make a list of car models based on your requirement and budget. Which type of car pleases you and your family? Is it a sedan, a hatchback or an SUV? You should take into consideration various factors such as family size, utility, road conditions etc. before making a decision.

· Prepare a Budget

Inspect all your financial resources to calculate your budget. The price of the car isn’t the only cost that you need to consider. You need to remember different costs such as insurance, fuel, maintenance and loan payments.

· Apply for your First Car Loan

Shop around for the best interest rate. First car loans are available at banks and dealerships. And, due to competition in the financial market, the interest rates are quite low. Thus, affordable interest rates will make becoming a car owner affordable for you.

Look ahead: How to get your First Car Loan and improve your Credit Score?

When you are buying a car for the first time, you may explore various financing options. As you are a first time buyer, you are likely to have zero credit score. Therefore, qualifying for your first car loan can be difficult. But, there are a few things which will help you in buying your first car.

· Pay a large down payment to the dealer. It will enable you in obtaining the best interest rate. As a result, your monthly payments will become manageable.

· Using a co-signer will significantly increase your chances of getting approval. The creditworthiness of the co-signer will help you in buying your first car.

· Search for specialized lenders. There are people who provide loans even when you have bad credit history or zero credit score. Compare various financing options available to you and choose the right one!

· If you are loan application is approved, make timely payments because it will help you in building your credit score.

When you are a first time buyer, buying a car can be an uncertain process. And, trying to obtain your first car loan will contribute to the feeling of uncertainty. But, when you are persistent, nothing is impossible. Shop for your first car loan today and buy your first car. It will provide you the opportunity to build your credit score.

Strategies to Renew Your Hope of Getting Bad Credit Car Loans

Facing constant rejection because of your bad credit history? Do you believe that low interest rates are just reserved for people with good credit? Do you think buying a car is just a distant dream for you?

Well, this piece of information can provide you relief and substantially increase your chances of getting an affordable auto loan. Last month Reuters ran published an article titled, “Car lenders ease credit standards and terms to spur loans”. It mentions that lenders consider car loans safe in comparison to mortgage and credit card loans. Also, lenders are now offering lenient credit terms due to weak credit demand. One of the credit bureaus, Experian, mentioned that percentage of new car loans offered to sub-prime borrowers increased by 11.4% this quarter compared to last year. This means people with bad credit can even buy a new car without any trouble.

So, getting bad credit car loans has become possible today. There is no better time to buy the car of your choice. But, are you still unsure of getting an affordable car loan? If you are still in doubts, make use of these strategies and not only get instant approval on your bad credit car loan but also avail the lowest possible rates.

Preparation Is the Key

Buying a car is major decision because you spend your life-savings on it. It is a commitment of making regular payments. You just cannot go to a dealer without thorough research. So, before purchasing a car or applying for an auto loan, here are few important things that demand your attention.

Clean-Up Your Finances First

Whenever you want to buy a car, do not just rush into the decision. You must sign the dotted line only after you are sure of what you are getting into. There have been instances where lenders have duped innocuous borrowers on the pretext of bad credit score.

It is always important to study your credit report before visiting the lender’s office. You can get a free annual copy of your credit report from annualcreditreport.com. Study all the entries and dispute for any unwarranted transactions and errors. It is a known fact that credit bureaus commit mistakes while calculating your credit scores. You can improve your credit by removing all the errors. Also, start making payments on your debts. Even if you can pay-off a few of your debts, it will have a positive impact on your credit score. Doing all this requires time and that’s why you must comprehensively plan your car purchase and avoid a hasty decision.

Down Payment to Down Your Rates

The initial upfront amount that you pay for buying a car can be a useful way of reducing interest rates. Making a substantial down payment of ten to twenty percent can lower your loan amount and thus, the lender’s risk. Also, the lender will be assured of your financial stability. This will definitely bring down your car loan cost.

Co-Signer – A Comforting Thought For the Lender

When you have someone to co-sign your car loan contract, the lender is assured of his money. This is so because he can get it from the co-signer if you miss out on payments. Finding a co-signer is a bit tough but if you can manage one, it would work wonders for your car loan.

If you just cannot find a co-signer, you can avail auto loans without co-signer which come with slightly higher interest rates. Nonetheless, it is important that you exhaust all your options before opting for no co-signer car loans.

Online Bad Credit Car Loans – A Better Option

An online bad credit car loan offers you the option of getting an auto loan without leaving the comfort of your house. You can apply by logging in to your computer. Online car financing companies are a perfect choice because banks do not entertain people with poor credit. To avail money from a credit union, you need to be its member. When you apply for a car loan from an online auto financing company, you have the option of comparing several auto loan quotes. This is not possible when you avail dealership financing.

Also, online auto financing companies work with several sub-prime lenders which make it easier for them to process your auto loan application. This drastically improves your chances of getting a low interest bad credit auto loan.

How to Choose Your Bad Credit Car Loans?

Choosing a bad credit car loan is easy if you carefully read the vehicle loan contract. It is essential that you do not just focus on low interest rates, but instead look at the bigger picture. Calculate Annual Percentage Ratio (APR) which will tell you the interest rate for a whole year instead of the usual monthly rate. It also considers fees like loan origination fees and other miscellaneous expenses which will give you a better idea of the cost of car loan.

Check for any pre-payment penalty because it can significantly increase your expenses if you decide to pay-off your loan early. Ensure that the lender is a reputed name in the auto financing industry.

A little bit of caution can take you a long way in securing the best auto loan option. Bad credit is never an issue if you know how to tackle it. These strategies and important cues will help you get easy approval on your car loan application.

Remember bad credit is just your history; it is in your hands to write your future. Go out there and turn your car dream into reality!

Cosigner for Your Auto Loan – Complete Interpretation of the Term to Help You Make a Wise Decision

Many a times while you are looking at your car loan contract, you may come across the term ‘cosigner’. A cosigner can be anyone. He/she can be someone from your family or your group of friends. Basically, a cosigner is someone who guarantees that if you cannot pay back the loan, they will be legally responsible to pay back the debt.

Key Requirements:

There are a few requirements which are essential if you plan to get a cosigner for your loan.

  1. Mutual Consent

The cosigner must be willing to sign the contract and pledge that he/she will pay the due amount as per the agreement, in case you are not able to make the payments. The guarantee is always taken in writing and the lender will not accept a verbal commitment.

  1. Proof of an Income Source

At the time of signing the contract, proper evidence of sufficient income must be provided. If your cosigner is employed with an organization, he/she will have to provide his pay-stubs. If he/she is self- employed, income tax return slips will become necessary. In case of failing to provide the proof of an income source, the lender may disapprove your loan application.

  1. Stability

Sometimes, potential lenders may dig deep to cross check your cosigner’s stability. They might want to check the cosigner’s reputation in the community along with his/her work tenure with the employer. They consider the cosigner as a part of your ‘team’ while approving the loan.

The Risk Factor

Apart from the requirements, you must consider the following risks before involving a cosigner:

· The major risk is the risk of financial setback to the cosigner. By agreeing to lend you a helping hand, the cosigner risks lowering his/her own credit score.

· The lender will sue the cosigner if he/she fails to repay the loan. So, it is advisable to pay off the loan on your own and not depend entirely on the cosigner.

· A cosigner cannot shy away from his/her responsibility after signing the contract. Hence, he/she is liable for your auto loan. It might lead to disagreements between you and the cosigner.

In the end, it is a personal decision to opt for a cosigner. The agreement between you and your cosigner must be clear from the beginning. It will ensure that there is no scope for confusion in the future. Remember a mature car buyer will not make others liable for his/her expenses and make monthly payments responsibly.