Are You a Candidate for a Poor Credit Car Loan

If you need to purchase a new car, one of the first questions you want answered is, "How much is it going to cost me." There is no question that owning a car represents an expense but for most of us, it is a necessary one. We need transportation to get to and from work, to transport our kids to school and activities, and of course to run errands to take care of other needs of our everyday lives. While you may be resigned to the fact that you need a car, you may not easily be able to figure out what kind of monthly expense you are looking at, especially if you have poor credit.

We have all seen the ads on tv advertising incredibly low car prices and monthly financing options. They show figures such as nothing down and 0% financing which seems like a fantastic deal and encourage many people to take the leap and head to the dealership. The problem is, those amazing deals don't always materialize once you show up. You see, those deals are specifically designed for people with excellent credit. If your credit is less than excellent, then your deal will most likely look a whole lot differently. In fact, in some cases, you may not be eligible to get the car financing through the dealership at all. You may be in need of what is known as a poor credit car loan.

A poor credit car loan is just like any other but the product itself is designed for someone who has a low credit score or who has maybe even had a bankruptcy. What lenders do is decide, based on your credit history, what kind of risk they are willing to take on you as a creditor. Then, they attach a specific interest rate to the deal. The bottom line is, the worse your credit is, the higher you will pay for a loan. It might seem like a conundrum in that those that are in the toughest of financial positions have to pay the highest fees, but that is the way the industry works. The better credit history you establish, the more secure the lender feels about giving you the money. Some decide that they will forego a car loan until their credit improves, but, securing a car loan and paying it consistently is one of the best ways to get your credit back on track in the first place.

Even if your credit is less than perfect, there are many lenders who will work with you and the percentages may not be as high as you think. Shopping online has become incredibly easy with numerous websites now competing for your business by establishing relationships with multiple lenders, All you have to do is fill out a simple app and wait for an answer. Once you lock in a loan approval, the company will overnight a check to you and you can hit the dealership with funds in hand.