Money Divide .com

Bad Credit Auto Loans

// December 8th, 2009 // Loans

Dealerships that specialize in bad credit auto loans will definitely want a higher down payment than other dealers. They do this because they want to be sure that if you default on the loan, they have gotten enough money upfront to safeguard their investment. On the other hand, the more money you are able to put into a down payment, the more you stand to lose if you fail to pay.  A bigger down payment gives you motivation to pay on time.  If you have poor credit, expect to pay down between 20 and 50%.

With most car loans you are required to make a payment once per month. With poor credit situations the lender may want to set up a payment plan that works with your pay date. Basically, if you are paid every other week, the lender may require payments on the same basis. This can be a lot easier for most people since the payments won’t be as high.

In many cases, your lender may require that you pay the dealership directly, but this usually only happens if you finance your car through a second chance lender.  As long as you have a clear idea of what you’re getting into, finding bad credit auto loans isn’t an impossible task.