• Car Loan Credit Finance: How to Get a Guaranteed Pre-Approved Auto Loan

    Times are tough these days, and if you are looking for car credit finance with bad or no credit, they can be even tougher. One way to get used car financing when your credit is not perfect, is with a guaranteed auto loan. Guaranteed auto loans often have a much higher interest rate then standard loans, but the advantages are they do help to build your credit and almost anyone can obtain one. Here is how.

    1. Get a Copy of your Credit Report and Credit Score

    Knowing exactly what is on your credit report and what your credit score is can help you to secure the best rates for a loan.

    2. Gather Your Financial Records

    You will need copies of your most recent pay stubs, tax records for 2 years, proof of your utility bills, lease, and any other regular payments that you make to show your debt-to-income ratio. The debt-to-income ratio tells the lender what you can afford to spend for your loan each month. The lower your bills and the higher your income, the more likely you are to be able to meet your auto credit finance obligation.

    3. Find a Lender

    There are many websites on the Internet that make this an easy task. Simply enter your information into their database and the computer should be able to match you with a lender or lenders in your area who specialize in the loan type that is right for you.

    4. Choose the Best Deal for You

    Once you have applied and been offered several deals to choose from, carefully consider each one before you make a choice. A guaranteed car loan has a much higher interest rate than a regular loan and not all are created equal. Read the fine print carefully. You will want to pay the loan off as quickly as you can, so make sure any loan you choose does not have stiff penalties for early termination. That way you may be able to refinance the loan later once you bring up your credit score a bit.

    5. Look around for Car Dealers

    If you really need a vehicle and cannot seem to find a loan any place else, many car dealerships offer a guaranteed loan program. However, keep in mind that the interest rate will almost always be higher at a dealership than it would anywhere else.

    6. Line Up a Co-Signer

    If at all possible, lining up a co-signer could make getting the loan a bit easier. With the use of a co-signer who has good credit, you may get a better rate for your loan.

    7. Tips and Cautions

    While a guaranteed car loan may be easier to obtain then a standard car loan, if you have no credit or bad credit, the interest rates are often very high. Try to make sure you choose a loan without penalties for early payoff so you can work to repair your credit and refinance at a later date for a lower interest rate. Just one or two extra payments toward the principle a year can significantly reduce your loan.