How car loans have changed

The credit crunch is affecting us all as lenders are now classifying low-risk creditors as potentially moderate to high risk when it comes to auto financing.

The credit crunch is affecting us all as lenders are now classifying low-risk creditors as potentially moderate to high risk when it comes to auto financing. Bad credit lenders can help you out of this situation if you find you have been reclassified. It’s not that you have done anything wrong it’s just that the rules have changed. A transgression from your past that never caused you any problems is now affecting your auto financing. Bad credit lenders specialize in dealing with individuals that are unable to secure loans through traditional sources.

If you’ve been denied auto financing, bad credit lenders are ready and willing to help you “get back on the road” with a reliable vehicle. With the economy in tatters and traditional lending sources tightening their belts when deciding whether to provide auto financing, bad credit lenders are contributing to the recovery by approving loans for individuals such as you.

If you find that you are now classified as having bad credit, don’t despair. It’s simply a classification based on the economic times we are witnessing. It’s a problem that can be worked out with some strategic thinking. Take this opportunity to apply for an auto financing loan and improve your credit score for your next vehicle purchase.

Obtain your credit report and review the contents. You may find some old accounts that remain unpaid. Clean these up by paying them now and keep records of the transactions. Give copies to the lender that you have chosen for an auto financing loan to show that you pay your debts.

If you have had an excellent credit rating for the last couple of years, approach your creditors and utility companies for a letter of reference. This will provide proof to your auto financing lender that you have changed your ways. When deciding on whether to provide auto financing, bad credit lenders are less concerned with your distant past. The contributing factor for loan approval is that you have the ability to pay and that you currently pay your bills.

Obtain a letter of reference from your employer and provide a copy to your potential auto financing lender. If there are no plans for layoffs at your company, ask them to state this in the letter. A secure job and a steady income is a major pre-requisite to obtaining an auto financing loan.

Calculate how much money you can afford to pay on an auto financing loan per month. Refrain from “stretching yourself” to make the payments. Look for an affordable car that is reliable enough to last for a few years and meets your minimum vehicle requirements. They’ll be plenty of opportunity to purchase a more expensive vehicle in the future when your credit rating has improved and the economy has sorted through its problems. Be sure to include maintenance, gas, and insurance costs when determining your ability to pay an auto financing loan.

THIS CONTENT IS FOR INFORMATIONAL PURPOSES ONLY. THIS IS IN NO WAY GIVING ANY LEGAL ADVICE OR REPRESENTATION. THE INFORMATION CONTAINED HEREIN WAS COMPILED FROM VARIOUS ARTICLES. FOR ANY LEGAL ADVICE OR REPRESENTATION SEEK YOUR OWN LEGAL COUNSEL.