Getting an Instant Car Loan with Bad Credit

April 29, 2013

Instant car loans lower the bar to entry, but they do have minimum requirements. Learn more about instant car loan advantages and disadvantages.

If you have bad credit, then getting instant auto loans is difficult, and you will have to pay a higher interest rate on your loans. This makes the process of buying a car far more expensive compared to a person who had a good credit history. But it's not all bad news. There are ways to improve your credit, as well as ways to maximize your chances of getting an instant auto loan with bad credit, while minimizing the rates.

See what kind of interest rates you can get >>

Improve Your Credit History

Not all "bad credit" is the same. Try to improve it as much as you can. Signs of improvement can mean a lot to potential lenders.

Get in touch with private credit history companies that will pull your credit history for you and verify it too. A credit rating of 580 or lower will immediately make you a customer with bad credit history. You can contest points that seem unfair or which are false. This process could take some time so get started on it right away if you know that you are a bad credit history patient.

Applying to many lenders when you have a bad credit history will just get you more negative marks on your credit history. So do not apply for loans until you have done all you can to make the best of your credit history. Get rid of anything that is negative and even pay off any outstanding loans that you have at present. This can substantially improve your credit rating which could result in a lower interest rate on your loan applications.

Get in Touch with Credit Unions

Credit unions will have a far lower interest rate that is set for loans. But they will think twice about giving loans to people who have a bad credit history. You might have to take on a secured loan where you give security or take on a co-signee to your loan. But with a secured loan you will get a lower interest rate that is far cheaper.

What to Expect When Applying to Online Auto Lenders

In getting your auto financing online, all you really need to do is to input all the necessary information into their forms. After submitting the forms you only have to wait. Within an hour or so, one of their representatives will call to discuss your loan.

Remember that the number of phone calls you will get will be the same number of applications you submitted. It's best to be prepared to discuss your interest in getting auto financing as well as your budget with numerous agents.

Lessen the Hassle with a Broker
Some individuals might find it taxing to input the same information through numerous forms online over and over again. If you're one of them, getting instant car loans is still a possibility by going through an online auto loan broker.

With an online auto loan broker you only need to submit your information for an application through them. It will then be their responsibility to match you up with a few online loan companies. This is a very good option to explore, since you're given numerous options to choose from and compare.

How to Apply to Online Lenders
Many lenders provide a way for you to receive instant auto loans online. This process helps facilitate financing for a new or used car purchase, and being approved instantly online makes the car buying process simper and lets the car dealer close the sale quicker.

In order to receive an instant auto loan approval, here are a few steps that you should follow. These steps will make the loan application process simpler for you.

  • Select a lender. Selecting a lender involves finding someone who can provide you with an auto loan that meets your needs. Using the Internet allows you to search different loan providers and compare the terms and conditions they offer. This comparison gives you the best loan offer based on your credit history, the type of car you are buying and the length of the loan. Lenders give their best rates to those individuals with good credit profiles so the higher your credit score, the better the loan. People with bad credit may also be able to find a lender that is willing to work with their situation and provide instant online approval for a loan.
  • Apply for the loan. When you receive a loan offer based on your information, begin the application process. Completing the application will allow the lender to process your loan request quickly and provide you with a loan agreement. The benefit of doing this online is that the process is done in a shorter period than meeting face-to-face with the lender.
  • Accept the terms. When the loan approval appears, review the terms to ensure that the offer meets your requirements. Upon review, simply sign the acceptance and you have completed the instant loan approval process.
  • Apply Now With CarsDirect >>

Applying for a loan online can be a simple and fast process that can be accomplished by anyone, regardless of his or her credit history. Follow these steps and you will be able to obtain an auto loan in no time.

CarsDirect Financing
CarsDirect helps more credit-challenged customers find car loans than any other website in the country. The company works with a network of dealers who specialize in car loan financing. The dealer has access to a number of financial institutions and will shop around to find you the best deal. Just fill out a simple application and you will be on your way to receiving a car loan.

The Dangers of Quick Car Loans

In today's consumer market, with many households maxed out on credit and without any substantial savings, people are looking anywhere and everywhere for quick money, including quick car loans. Some consumers do this to get their hands on a newer vehicle that will keep them on the road longer. However, many financial experts are warning us that quick money is not always a sound financial source. Here are some of the hidden pitfalls in getting quick car loans.

  • High interest rates are lurking. A quick deal may not include appropriate time spent in discussing interest rates. The APR or annual percentage rate determines what a borrower will pay in interest in each annual period. This is extremely important to keep an eye on. Quick money with a high interest rate just means more cost for the borrower at the end of the loan period.
  • Quick car loans using collateral can be a major liability. Another aspect of quick car loans and quick money situations is for the lender to offer easy money up-front by securing a loan with collateral. But, whether it's an existing vehicle or a piece of property, this collateral will always be up for repossession or seizure in cases of nonpayment. Consumers taking quick car loans do not always take time to recognize this factor, and later, when their homes or vehicles are in jeopardy, they will regret being quick to take easy credit.
  • Long-term loans accrue ridiculous interest. Although some states are trying to regulate high interest rates, and the federal government is also getting involved, it's hard for these organizations to help consumers monitor the debt that builds up in long-term loans. A longer term naturally means more interest paid over time. The problem with these kinds of loans, particularly in quick money situations, is that a borrower is in danger of forgetting about a responsibility while it naturally grows in the financial background. Often, when debtors start to pay attention, it's too late to avoid much of the interest that has built up over time.
  • There are often hidden charges. When a company is advertising quick car loans or quick money, they're not advertising the costs. Extra charges include up-front fees for arranging the deal, late fees for late payments, and all kinds of big charges that occur whenever a borrower gets behind. It's important to read the fine print in quick money deals to know just what the lenders stand to gain before signing.

Keeping these simple elements in mind will help consumers avoid getting taken advantage of by quick money deals and quick car loans that may not be as easy as they sound.

Instant Auto Loans for Used Cars: Approval Steps for Bad Credit

The following are all important if you are attempting to obtain an instant car loan approval but have bad credit:

  • Your most recent bank statement
  • Your most recent pay slip
  • A verifiable job
  • Your driver's license
  • Six references
  • Your electricity bill
  • Your phone bill
  • A cosigner (optional)
  • Vehicle insurance
  • A down payment

Here are a few tips:

  1. Be realistic in your expectations. A person with bad credit will need to be realistic and not have high expectations regarding the amount of money that the bank will lend them. Be aware that very few dealerships will allow a person with bad credit to finance a vehicle without a deposit.
  2. Source "bad credit" dealerships. Certain auto dealerships specialize in financing used vehicles for people with bad credit. The financial institutions and lenders that these dealers will approach are prepared to finance buyers with bad credit, and are frequently much more flexible than standard finance institutions when it comes to a down payment. The buyer must however be prepared that some of these dealerships will demand a higher interest rate than they would from a person with good credit. You can search for them in your local phone directory or on the Internet.
  3. Supply the required documentation. Be prepared to supply the chosen dealership or lender with all the necessary documentation that they require (see list above). Selected lenders and dealerships will accept a debit card account in place of a personal checking account.
  4. Discuss your finances honestly. The majority of dealers and/or lenders will want to discuss (if only briefly) details of your lending level. Select points like the amount of down payment that you can actually afford will be discussed. It is best to be realistic and honest at this stage so as to prevent further bad debt in the future due to the inability to make the monthly payments on this venture. This discussion will also help to narrow down the choice of vehicle related to cost and monthly payments that you will be able to afford.
  5. Initial interest rate concerns. Although the initial interest rate may sound very high, the lender or dealer may be in a position to place you in a program that allows for refinancing the vehicle after a period of time, which will normally be after 12 to 24 months. Refinancing offers a lower interest rate which, if you're successful with the application, can save thousands of dollars.
  6. Be cautious. Research the dealership or lender before arriving and always be cautious of the person who is willing to offer you the vehicle without any down payment, even though you have bad credit. Compare the deals and get the auto loan. Having bad credit to begin with should make a person cautious of not aggravating their bad financial situation any further. Fortunately, even though you have to be careful, it is possible to get guaranteed instant loans, even with a bad credit.
  7. See what kind of interest rates you can get >>

4 Requirements to Qualify for Quick Car Loans

One way for someone with little to no credit to build or rebuild credit is to obtain quick car loans in order to buy a vehicle. Of course you have to be able to make regular payments if you're looking to build a positive credit rating, so always keep that in mind. There are a few car loan requirements to think of when looking for quick financing.

  1. Be employed. All places you can find quick car loans will require that you have a job and bring in your most recent paycheck stubs in order to prove that you have a job.
  2. Meet length of employment requirements. Some car loan lenders will require a minimum amount of time for employment, meaning you will have to be at the same job for at least one full year before you can qualify for a car loan. Some lenders will still offer you a job regardless of employment time, though sometimes the interest rates will be higher in these cases.
  3. Meet state legal age requirements. Some state laws will require you to be 18 or 21, depending on the legal age of your state. Another option is to have a co-signer who has to be a legal U.S. citizen.
  4. Bring proof of identity. You must have proof of your identity on hand when applying for a quick car loan. Your driver's license, passport or social security number will work.

Quick car loans are an easy way to build or rebuild credit for anyone. They are simple, and do not require much in order to obtain one.

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