Longer Auto Loan Term: Is it a Boon for Bad Credit Car Buyers?

Auto loans are tricky. A single error can ruin your financial stability and earn you high interest rates in future. So, it is important that you understand every aspect of the loan process and make a wise decision.

When it comes to analyzing the multiple aspects of an auto loan, loan term takes a backseat. If you are in the loan market and confused over choosing the perfect auto loan program, do not commit the mistake of ignoring the loan term.

What are the Different Auto Loan Terms offered by Lenders?

A couple of years ago, the recommended term offered by lenders was 5 years or 60 months. However, the time has changed. Today, you can easily obtain 8 years or 96 months loan. Also, there have been instances where you can keep making payments on an auto loan for 9 years or 108 months.

Is a Longer Auto Loan Term considered as a Boon for Bad Credit Car Buyers?

If you are a bad credit car buyer, you will obtain higher interest rates than a good credit car buyer. Lenders understand that higher interest rates will make monthly payments difficult for you. So, they provide longer loan terms to make monthly payments bearable. Does it mean a longer loan term is a boon? It’s time to understand the financial effect of it.

The Interest Amount

If you have bad credit history, lenders will provide you with high interest rates. And, higher interest rates over a long period of time means higher amount of interest.

The Upside Down Situation

If you obtain a short-term auto loan, you will be in an upside down situation for the first couple of years. But, if you opt for a longer loan term, you will owe more than the car’s worth for several years. It is because you will make smaller payments every month.

The Selling/Trade-In Problem

If you are in an upside down situation, your car has no equity. It is difficult to sell such a car and buy a new one. Also, it is a challenging task to trade-in the car for another vehicle.

The High Maintenance Cost

If you opt for it, you will face difficulty in selling the car. And, if you keep using the car for several years, you will have to take care of increased maintenance cost such as higher repair cost and greater fuel expenses.

When is a Longer Auto Loan Term recommended to Bad Credit Car Buyers?

It makes financial sense in the following situations :

1. If you have received very low interest rates on the loan

2. If you can opt for substantial down payment and reduce the chances of an upside down situation

3. If you use your car for a very long time

There is nothing wrong in opting for a longer auto loan term. But, it is important to ascertain your situation before making a decision. Remember to look before you leap.

Fast Auto Loan Approval is the ideal financing partner for bad credit car buyers. Obtain second chance auto loans and get ready to buy your favorite car quickly. Apply now for bad credit auto loans and bring home your dream car.

Zero Down Payment Auto Loans - A Non-Traditional Option for People with Zero Savings

Zero Savings? = No Loan!

This is the modern day mantra of most lenders. They require you to make down payment of at least 10% before approving your car loan application. But, it is not possible for every car buyer to save money for down payment.

What are your options when you have zero savings for making down payment?

It is okay if you have no cash or savings for making down payment. Here are a few options that can help you in your times of distress:

1. Trade-in or Sell your Car

If you have a car with equity in it, you can use it to reduce the loan amount of your new car. But, before you trade-in your old car, it is important to ascertain its selling price. If you can manage to get a higher selling price than the trade-in value offered by the dealer, it is profitable to sell your car. You can use the proceeds from the sale towards making down payment.

2. Manufacturers Incentives

Usually, manufacturers provide handsome cash incentives on new car models. You can select the car model with the highest incentive and use it to make down payment.

3. Zero Down Payment Auto Loans

Other than the above-mentioned options, there is one non-traditional alternative that doesn't require any car or incentive. The zero down payment auto loan program is a great option for the following people:

(1) Car buyers without any car to trade-in

(2) Used car buyers

(3) Buyers who have chosen new cars without cash incentives

Who can apply for Zero Down Payment Auto Loans?

The eligibility criteria for the loan program are uncomplicated. Anyone above 18 years of age and a valid SSN can apply. To obtain zero down payment auto loans, you must fulfill common lending requirements such as:

>> Stable employment

>> Regular income

>> No repossession in last one year

>> No open bankruptcy

>> Regular payment of utility bills

>> Lower debt-to-income ratio

Usually, lenders that provide zero down payment auto loans require your gross monthly income to be higher than $2,000. It is because the loan program is slightly expensive than the traditional auto loan programs.

Where can I apply for the Loan Program?

You will not be able to obtain zero down auto loans at traditional financial institutions like banks and credit unions. However, there are many auto dealers and online auto financing companies that believe in undertaking higher risks. Such dealerships and companies can help you with your loan application.

So, don’t wait anymore. Apply for zero down payment auto loans today and bring home your dream car without making down payment.

4 Easy Tips 4 Instant Auto Loans Approval in Washington State

Auto financing companies and car lenders in Washington often make a pitch for "Instant Auto Loan Approval". But, you should not apply without thorough preparation. Remember that if you plunge into the auto financing world without a proper plan, you will fail in your pursuit of instant approval.

It’s not very difficult to obtain instant auto loan approval in the Evergreen State. With just few tips and strategies, you will be confident of achieving your goal. So, without wasting any time, let’s start.

1. Myths about Credit Score

Many people are scared of their credit scores. But, credit history or credit score is not the only criterion for approval. Lenders consider several aspects of your loan application e.g. your income, age, employment, financial details, etc. So, don’t worry if you have bad credit history. Simply provide your income and employment details along with your financial documents. It will help the lender in ascertaining your stable financial condition.

2. Down Payment in Cash is not compulsory

Many experts of the auto financing field suggest making a down payment. But, it is not important if you have a good credit score. Lenders analyze your financial history. And, if they find regular payments in the past and current stable financial condition, they won’t compel you for down payment.

Also, down payment becomes less crucial if you are buying a used car. It is because used cars have low price and lower depreciation rate in comparison to new cars. In such a situation, lenders don’t have to undertake higher risk and thus, they won’t worry much about putting money down.

3. Trade-ins and Car Sale can help you

Now, you know that a down payment is not compulsory for used car. But, if you are buying a new car in Washington, it can very helpful. You don’t have to spend money from your wallet. You don’t even have to break your savings for down payment. Simply use your old car as down payment. Confused? Well, it is simple. You should ascertain the trade-in value of your old car. Your local dealer will be able to tell you that. Also, ask its sale value. In this case, you must not just rely on dealers. But, you can put it up online and check the response for your car.  If you are getting good price, sell it online and use the same money as down payment.

4. Co-signer aids in Instant Approval

It doesn't matter if your credit score is good or bad, additional help is always welcomed by lenders. A co-signer will help you in getting instant approval and affordable rates. The reason is simple. Lenders view co-signer as a guarantee of regular returns. They don’t mind if the co-signer makes monthly payments as long as they receive regular payments. Co-signer ensures the lender of safety and security. So, find a person with good credit score. He should be able to assume additional debt responsibility.

So, these are things that can help you in getting instant auto loan approval in Washington state. Remember that the key for instant loan quotes lies in increasing lender’s trust in your loan application. Increase his faith in your financial stability and your chance of quick approval will increase instantly.

All the Best!