A
person can be credit-damaged due to many reasons. You may have missed
certain payments or paid them later than the stipulated date. However,
the most common question that arises when bad credit individuals go for
auto loan shopping is: Is there a possibility of an auto loan with no
money down?
The
answer to the question is positive. If you have suffered from a bad
credit history, obtaining an auto loan with zero down payment is a
possibility. The process of getting auto loan approval becomes easier if
you have started to improve your credit score. However, if you are
still lurking in the waters of bad credit, you can avail car financing
with no money down but you will have to work hard for it. To ensure
success, take a look at the essential FAQs and understand how you can
make the process simpler for you.
Essential Car Buying FAQs to get Bad Credit No Money Down Car Loans
Is a Strong Source of Income Required for Bad Credit No Money Car Loans?
Sub-prime
lenders are a shining beacon for individuals with bad credit. Usually,
sub-prime lenders do not put unnecessary focus on the credit score of
the applicant. Bad credit applicants who turn to sub-prime lenders can
get auto loan approval within two business days. However, a strong
source of income is a necessity for getting bad credit auto loans,
especially when there is no possibility of making an upfront payment.
Lenders can only judge your creditworthiness on the basis of your
income. Therefore, make sure you have proof of stable employment and a
strong source of monthly income in order to qualify for the loan.
How Will a Co-Signer Help in Getting Auto Loan Approval?
A
co-signer with a stellar credit score can immediately give you a boost
in credit approval. A lender assumes less risk while approving car
financing when you have a co-signer. A co-signer is bound to repay the
auto loan in case you miss a few payments. So, make sure you have a
co-signer who has been consistent in maintaining a good credit score and
who has a substantial income to support you.
Should I Go for a New Car or a Used Car?
A
used car will be inexpensive as compared to a new car and will help you
to gain car financing with no money down. Alternatively, you can choose
old car models that are lying with the dealer at a lower price. You can
also choose demo cars. Remember that when you buy a demo car from the
dealer, you stand in a great position to negotiate as the dealer
essentially wants to create extra shelf space for the new cars. Thus,
make sure you purchase a car model after thorough consideration of the
consequences.
Will the Interest Rates be affected when I do not make a Down Payment?
Yes.
Compared to a traditional auto loan where you are paying money down, an
auto loan with zero down payment will attract high interest rates.
However, if you are regular with your payments, your credit score will
increase. This will lead to lower interest rates in the future. If you
want to reduce the total interest amount, you can make early payments
and pay off the loan before the loan term ends.
Does avoiding a Down Payment put me in an Upside-Down Car Loan Situation?
Most
car buyers are in an upside-down car loan situation during the first
few years of the purchase. It is because of the depreciation rate. Your
car depreciates in value as soon as you drive it off the lot. Do not
worry about it. If you want to sell your car early, make sure you make
extra payments so that the loan amount decreases significantly. This
way, avoiding down payments won't have a major impact on the loan
amount. It will help you to manage the situation in a better way.
Will bad Credit No Money Down Auto Loans improve my Credit Score?
Bad
credit and no money down auto loans can only improve your credit score
if you make regular payments and the lender reports your income to the
credit bureau. Do not delay any payments. A co-signer will help you to
maintain a good credit score and support you in the approval of car
financing as well.
Zero Money Down Auto Loans: The Best Resort for Bad Credit Buyers
People
who do not have a great credit score can avail auto loans where no
money upfront is required. With bad credit no money down auto loans, you
stand a solid chance to re-build your credit score. If you are unable
to find a lender offering you the required auto loan option, go online.
Many online auto financing companies deal with bad credit car buyers and
will help you buy a car without a down payment.
Buying
a car with bad credit can get frustrating, especially when you do not
have a down payment. Luckily, help is available. You can get bad credit no money down auto loans and make a quick car purchase. Apply now for pre-approved auto loans today.
