Second Chance Auto Loans - Perfect Option for Buying a Car and Improving Your Bad Credit Score

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.

1. SSN 

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.

Getting The Best Car Deal Online

What are the best car deals that you can avail of or what are the present car loan rates in the market are the questions that banks and financial agencies face from car buying customers. There are different phases in a year when the car buying spree increases among the Indian customers. Diwali, New Year's and other festive or auspicious occasions see a rise in car buying among the Indian customers.

Nowadays the internet has become a convenient source for such information. One does not have to fall into the traps of financial agencies and banks who try to lure customers to opt for their loan instruments and try to make them believe that they have the best deals for them. One can make independent comparisons thanks to the online websites which exist. The car selling or information forums do not only carry information about cars but also the best finance deals for the customers.

Factors to consider

Look for the lowest interest rate in the market. If banks like HDFC are claiming to have the best car deals in town, then you need to verify that claim. From Axis bank to ICICI, one can log onto helpful forums where one can get information about the different car loan rates. Again, the lowest rate should not be the sole deciding criterion. Some banks offer the option and the convenience of e-approval. One can opt for instant loan approvals online. Transparency is another feature which one should look for. All important information related to the loan should be disclosed to the customers at the very beginning.

How to get a car loan online

Usually the car forums have a feature called the eligibility calculator. Are you eligible for an auto loan? How much? These questions are easily answered when one avails of such a feature. Not only can one find out about one's eligibility, one can also compare different offers.

Getting car loans sanctioned

Once one applies for a car loan online, one can expect to be contacted by the lender within a day or two. The website also sends updates regarding the loan application status. One can even opt for SMS alerts. There are EMI calculators on such websites. These allow one to know what exactly will be the monthly interest burden.

In such ways one can get enough information about auto loans, their rates and the best ones to opt for.