Instant auto loans are advertised across the Internet as the answer to having negative credit. While this kind of loan is not usually entirely instant, it is a good way to secure a car loan with a minimum of effort and inconvenience.
Instant Auto Loans
In many cases Internet sites advertising instant car loan either have their own lending sources. After approving a loan application, they direct the borrower to one of their approved dealerships, or collect a preliminary loan application, which is forwarded to multiple lenders. In turn, the lender(s) contact an applicant with loan offers. The first case can be convenient, but offers little for loan comparison of rates and loan terms.
One of the primary factors in almost any loan, whether it is a car loan or any other type of loan, is your credit score. Before you apply for an instant auto loan, it is smart to go ahead and order a copy of your credit report. This will allow you to not only review your current credit score, but also to review the report for any errors, incorrectly reported information or omissions in your credit history.
If you discover any errors or omissions, you can proactively challenge negative information and add positive credit information. By performing these tasks, you can potentially improve your credit score which will usually result in better instant auto loan offers from lenders.
While your credit score is not the only factor in a lender's decision about a loan application, it is a large one. However, even if you have bad credit, many borrowers are able to find a lender who is willing to work with them. Consider that good credit is considered a credit score of 680 or higher. Excellent credit is considered anything over 700. However, the average credit score is around 650. As a result of the current economic climate, many lenders are willing to compete for loans, and so your credit score may not be the complete deciding factor in getting a car loan.
Applying for an Instant Loan
Part of applying for an instant car loan is deciding which type of lending website you want to work with. If you have bad credit, it may be a better option to choose a loan clearinghouse site, which will allow you to review several different instant car loan offers. Keep in mind that you will be required to provide basic information like your name, social security number, monthly income and credit score. This is why you need such information prior to applying.
You should also not be in the process of bankruptcy and if you have a bankruptcy in your past, it should be completely discharged.
You cannot have had any repossessions in the 12 months prior to applying and you must be able to prove residency and citizenship.
Even if you have bad credit, in most cases you will know within 24 to 48 hours if your loan application has been approved. In the end, while instant auto loans are advertised as happening within moments, usually your loan application and credit report will need to be reviewed by a loan manager who will decide if you have demonstrated credit worthiness, ability to pay and provided collateral in the form of the car you hope to purchase. Once your loan is approved, you can then go to your seller and complete the terms of the sale.
While instant auto loans may not be completely instantaneous, they take much less time than visiting and negotiating with multiple car lenders. If you have bad credit, review your credit report prior to applying for this type of car loan and make any repairs possible to improve your credit score. Ultimately, your application and credit report will be reviewed by a human finance manager.