Processing a Car Loan with Bad Credit
Processing a Car Loan with Bad Credit
When your car loan is approved despite having a bad credit, what are the things that you should expect?
The fact is, consumers with credit issues have no idea what comes next after their car loan is approved.
Here at Auto Credit Express, we have been assisting people for the last twenty years on how to buy a car even with low FICO Scores. Our website is available for any topic they want to research on such as repossession and how to process car loan with bad credit.
Application Process
In buying a car, you cannot instantly pick a car you like. The car dealer will first contact you to have an interview with the finance manager. After the interview is completed, your application will be forwarded to different lenders that suit your credit profile.
The finance manager will have to wait for the lender’s notification before you can choose a car you want.
Verified Information
The lender carefully checks your income and pay slips, your length of employment and W-2 wage statements of previous years for your work and income history. Any other necessary information to qualify your car loan application may be required by the lender such as your expenses so that he can compute accurately the amount you are capable of paying monthly.
Credit level
The lender after having checked your credit scores and other factors such as job stability and credit history will then place you in a credit program tier. This will determine the interest rate, the term of payment and the down payment required. The car dealer then will be notified by the lender in the form of payment call.
Your car choice
The finance manager once he receives the payment call will check the car inventory to determine a car that fits your paying capacity. For newer cars with lower mileage, the term of payment is longer and the interest might be lower.
Wrong car choice
The problem arises when for example you choose a 5 year old pickup with a mileage of 70,000 miles. Even if the car is in good running condition, the problem is the term of payment is shorter and the interest rate is higher. In other words, the car budget may not fit your choice. Therefore, you have to make another choice.
In Conclusion
In choosing a car, it is important that your choice fits your budget. Your goal is to establish a good credit and not to get the car that you dream of.
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