Cars have become America's necessity and that's why; no person should be turned away from auto financing. Most Americans don't know that credit score is not the only factor for car loan approval. Most car buyers don't know that they can get an auto loan irrespective of their credit history. Second chance auto loans are possible for bad credit borrowers and give a perfect opportunity to buy a car as well as improve their credit score.
What are the Benefits of 2nd Second Chance Financing?
When you want to buy a car and there are no lenders to offer you car loans, second chance auto financing companies are perfect for you. You can enjoy easy car loan approval process. If you make regular payments, your credit score will also improve. This means you can start re-establishing your credit ratings with second chance financing for auto loans.
How to Get Guaranteed Approval on Second Chance Car Financing?
People with sub-prime credit are often considered high risk borrowers. So, it is important that you lower the risk. If you are successful in doing that, low rates and guaranteed approval will become a reality with second chance financing.
Get your Numbers
Once you decide to buy a car, it is important that you know your budget and research your credit report.
You must know how much monthly payments are enough for you. This can be known by calculating your monthly financial affordability. Make sure you keep in mind all car related expenses because you don't want to fall behind on payments. If you do so, it will cause more damage to your credit score.
Choosing the Car
Choosing your car is very important. You must understand that cars are a major investment and so, it is better to opt for a reliable car that satisfies your needs. Don't choose a cheap car with a high chance of being a lemon. Instead, you must select a car after doing proper research and after getting expert opinion.
It's okay if you opt for a used car because nowadays sub-prime lenders have no problem in offering second chance loans for new cars and old cars.
Down payment And/or Trade-in can Increase your Approval Chances
By trading your old car for a new one, you can lower your car loan amount. Its effect would be the same if you made cash down payment. When you make a down payment or get a trade-in, its amount is deducted from the total car cost. This means your auto loan amount is reduced. As the lender has to finance a lesser amount now, he won't have any trouble of your very poor credit score.
Search a Co-Signer to Easily Sign the Contract
When you have bad credit, lenders know that you have had trouble in making regular payments. Even though it is in the past, they still need assurance of the safety of their money. So, most lenders ask for a co-signer. It is not compulsory to get a co-signer but it is advisable. When you don't have good credit, a co-signer will substantially lower the credit risk and thus, your interest rates will also nosedive.
Get Ready with Documents
Second chance car purchase program doesn't require you to have several documents. You just need to be ready with the standard paperwork.
2. Credit Report
3. Financial/Bank Statements and Reports
4. Income proof- Pay stubs/Income Tax Return Statements
5. Residential Proof- Receipts of utility bills
When the lender sees you ready with all the documents, he will understand the importance of second chance car loans to you. He will know that you are determined to buy a car and make payments on time. This will ensure that you get guaranteed approval in no time and that too with lowest possible rates.