There are many reasons people find themselves needing a bad credit car loan or a high-risk auto loan. This can be caused by an accident, a loss of employment, or another personal or financial struggle. All these issues can affect a person’s credit score. They can also make it impossible for someone to be approved for a conventional car loan.
At Car Loan Cash Now we are dedicated to helping people needing a high-risk auto loan. If you have found yourself in financial difficulty and need a loan, we would be more than happy to help you with your search. Besides finding you an appropriate lender, we can help set you up with lenders that will refinance your current loan. This extra service can help you get the cash you need to get your new car.
Bad credit is a problem when applying for financing. But, there are great high-risk auto loan options out there for every individual situation. At Car Loan Cash Now we can help you find a loan to suit your needs. We also guarantee you the best terms and interest rates.
Unfortunately, there are quite a few lenders that take advantage of people needing a high-risk auto loan. They often use the fact that a person is in a bad situation to force them into a car loan that does not suit them. These normally involve high interest rates and longer repayment terms. This may give you a car but it will put you under more financial pressure in the long run.
Car Loan Cash Now high-risk auto loan lenders are honest and work with you to give you the best deals. We can set you up with various financial institutions willing to overlook your bad credit rating. If you can prove you can pay back your loan, they will treat you like any other borrower.
We don’t ask for an application fee or obligation from you. At Car Loan Cash Now, we aim to help you get back on your feet with the right high-risk auto loan. Below, we’ll explain all the challenges you’ll face when applying for a high-risk auto loan. We’ll also offer some tips on how to get one and how to repay it successfully. We will provide you with a detailed explanation on how to avoid damaging your credit further while looking for the best financing options.
Table of Contents
- How Lenders Decide Whether to Grant you a High-Risk Auto Loan
- Approval Criteria for a High-Risk Auto Loan
- How to Choose a High-Risk Lender
- Get the Best Deal on your High-Risk Auto Loan
- Assess Your Current Situation
- Find the Right Kind of Car for Your Bad Credit Auto Loan
- Take Your Time Completing Paperwork When Applying for a Bad Credit Loan Online
- Calculate Your Budget
- Save Up for a Down Payment on a High-Risk Auto Loan
- Be Flexible with Your Requirements and Choices
- Get a Co-Signer on Your High-Risk Auto Loan
- Improve Your Credit Score
- Understanding High-Risk Auto Loan Refinancing
- Co-Signing and Co-Signers for a High-Risk Auto Loan
- Getting a High-Risk Auto Loan with Car Loan Cash Now
- Conclusion: How Do I Find the Best High-Risk Auto Loan?
How Lenders Decide Whether to Grant you a High-Risk Auto Loan
First of all, you need to understand what matters to a lender when they consider which high-risk auto loan applications to approve. A financing institution takes a certain amount of risk every time it grants a loan. There is always a chance that the debt won’t be repaid. But when it comes to high-risk auto loans, the risk is much higher.
In order to protect their investment, high-risk lenders use a variety of methods. The most common of them are:
- Doing a complete credit check.
This allows the lender to track a person’s positive and negative credit habits. This assessment helps them understand whether or not the loan can be repaid.
- Using the car as a collateral.
With this, the lender retains the right to repossess the vehicle if the borrower can’t make the payments.
- Conducting a thorough check of the borrower’s financial prospects.
The lender will assess a person’s current financial situation to establish whether or not they can repay the loan.
If you need a high-risk auto loan, can make the payments but have a bad credit rating, Car Loan Cash Now can help!
Approval Criteria for a High-Risk Auto Loan
Requirements for high-risk auto loans vary between lenders. But general guidelines are as follows:
- You must be 18 or older
- You must be a legal citizen and current resident of the US or Canada
- You must have a gross income of no less than $1,500-$1,800 a month with a full-time or fixed job
- You must have held the job for at least a year
The Difference between Conventional and High-Risk Lenders
The main difference between normal and high-risk auto loan lenders is their attitude towards the credit score. Banks and other conventional lenders rely on it as the primary determinant of the borrower’s ‘reliability’. A person’s credit report tells the history of their defaults and other financial problems.
If you are a young person with little job experience and no credit history you will also have a poor score. Another reason your rating could take a considerable downturn is if you get into an accident or lose your job. This will put you in a difficult financial situation and make it impossible for you to follow your credit obligations.
High-risk lenders operate on a no credit basis. This means they can overlook your score and focus on other factors to protect their investment. When looking for a high-risk auto loan, you may have to settle with the following requirements:
- A minimum down payment of 20%
- High interest rates
- A “Buy Here Pay Here” policy
Each of these requirements can put a person in a difficult situation. But, can you avoid this? Yes, you can! At Car Loan Cash Now we will help you find a reliable high-risk auto loan lender that won’t need any of the above. This allows people to get financing with reasonable terms.
How to Choose a High-Risk Lender
When you are looking for the best high-risk car loan you should aim to avoid lenders that have high service fees. The most important rule a borrower with bad credit should follow is to stay away from loans with high rates and extended monthly payments. If you keep this in mind you will be able to avoid making your financial situation any worse than it already is.
Use Secure Quote Comparisons and Online Auto Loan Calculators
These tools allow you to choose a high-risk auto loan with the best terms quickly and efficiently. Use the Car Loan Cash Now resources section to find the most reliable online car loan calculators. If you know where to apply for your high-risk auto loan you’ll be able to get great deals and prevent more damage to your credit score.
Consider Taking a Loan from a Credit Union
Credit unions offer more leeway to their customers when it comes to high-risk auto loans. Their rates are competitive and they usually overlook poor credit scores. Credit unions are a great option for people wanting a high-risk auto loan with low-interest rates.
What Defines Credible High-Risk Lenders
Trustworthy high-risk lenders don’t try to take advantage of your situation by forcing high rates and fees on you. Instead, they focus on getting repeat business and building a solid reputation among bad credit borrowers.
Reliable financial institutions are more interested in your current income, not your credit score. This approach allows them to find many clients and get a return on their investments while making a steady profit. In turn, satisfied borrowers spread the word about the lender. This attracts more business to them making it a ‘win-win’ situation for everyone.
At Car Loan Cash Now we will put you in contact with lenders like this so that you can get a high-risk auto loan that you will be able to pay off with no problems. Our experts will conduct thorough market research on your behalf so that you get a bad credit car loan tailored to your needs.
Get the Best Deal on your High-Risk Auto Loan
There are a variety of methods a person with bad credit can use to gain approval for a car loan. Be sure to research your options so that you get the most favorable deal for your circumstances.
Assess Your Current Situation
To choose the most efficient strategy, you need to understand where your credit rating stands. The Car Loan Cash Now Resources section provides a detailed explanation on how to get this information. With this, you will be able to assess your chances of getting approved for a high-risk auto loan. Note that in some cases, it might be better to focus on improving your credit score before you apply for any financing.
Find the Right Kind of Car for Your Bad Credit Auto Loan
It’s essential to understand that not every car is the same. Different cars bring different risks to different lenders. Newer cars are more expensive. Also, certain cars have higher insurance rates making the overall costs more. Car Loan Cash Now offers New and Used Car Buying Guides that will teach you how to pick a suitable vehicle. In addition to this, they offer tips on negotiating with dealers that will allow you to get the best deal out there.
Take Your Time Completing Paperwork When Applying for a Bad Credit Loan Online
One of the biggest advantages of applying for a high-risk auto loan online is that you can fill out the paperwork at your own pace. It’s imperative to put in as many details as possible. Bad credit lenders will use your application to determine whether they should lend you money despite your credit rating.
Be thorough when filling out the income section of the application form. Don’t forget to list any regular income (child support, etc.) as well as your income tax or 1099 (if you are self-employed).
Feel free to contact us if you are having any difficulties. Our experienced operators will provide you with a consultation and help so that you can fill out all the forms correctly.
Calculate Your Budget
Working out your budget will help you understand what kind of high-risk auto loan you can afford. To start, you must calculate your monthly bills and personal expenses. Then, you need to add your car loan payments, monthly or weekly fuel costs, insurance, maintenance and repair costs. By building an outline of a budget with these figures you will have a better idea about how much you can spend a month on your high-risk auto loan.
With a bit of budgeting and planning, you will be able to choose a high-risk auto loan that will allow you to buy the car you want. This is also a great way to boost your credit rating back up.
Save Up for a Down Payment on a High-Risk Auto Loan
Making a down payment will allow you to get better car loan payment terms even with bad credit. In fact, many financial institutions only grant auto loans to high-risk borrowers if they can make a cash payment upfront.
Car Loan Cash Now can provide you with budgeting tips that will help you save money on every paycheck. This will enable you to have enough money for your down payment quickly. If you manage to set aside at least $500 every month, you will make a much more positive impression on the loan officer. Just by mentioning that you’ll make a down payment of $2,000 will give you a much lower rate despite your credit situation.
Note that if saving this amount of money on a monthly basis is unrealistic for you, there are other options. Car Loan Cash Now offers a wide selection of no down payment high-risk auto loans to choose from.
Be Flexible with Your Requirements and Choices
When applying for a high-risk auto loan, you need to be flexible. You may need to compromise on some of your requirements to achieve your ultimate goal of becoming a car owner. The best way to start is to research your options so that you understand different lenders requirements. In some cases, the lender may ask for a larger down payment or need you to take out a longer loan.
At Car Loan Cash Now we would advise you to find the best high-risk auto loan deals and get approved before choosing the car that fits your budget. Remember to be realistic with your expectations. Finding a high-end sports car or a luxury sedan with a poor credit score may be a little far-fetched. A high-risk auto loan is for people wanting a reliable, mid-sized vehicle at a reasonable price.
Get a Co-Signer on Your High-Risk Auto Loan
Co-signing is one of the most efficient methods borrowers can use to get past the restrictions set by a bad credit score. The co-signer could be your friend or family member. Co-signers who are family members have an easier time getting approval for high-risk auto loans.
This option can even help people with a very low credit score. However, you must be sure that you can repay the high-risk auto loan before taking it out. If you don’t you could not only damage your relationship with your co-signer but damage your credit rating further. Please note that if you find yourself unable to make the repayments, the co-signer is responsible for doing so.
Improve Your Credit Score
If co-signing is not an option and your credit score is bad, you should consider improving it before applying for a high-risk auto loan. There are several ways you can achieve this:
- Contact your creditors and develop payment plans you can keep up with
- Pay off part of your debt with your savings (if you have any)
- Get financial counseling to learn how to manage your credit in the most effective manner. This counseling will be based on the laws and regulations of your state.
Sometimes improving your credit score is as easy as removing some incorrect statements. You can achieve this by contacting credit reporting agencies and filing a complaint about a mistake in your report. This said, some marks, such as bankruptcy, are impossible to erase from your report for years. Thus, you’ll have to look for a bad credit car loan even if your current financial situation is favorable.
Understanding High-Risk Auto Loan Refinancing
Refinancing an auto loan is an effective way to save some money while you are in a difficult financial position. High-risk auto loan refinancing gives you the opportunity to re-negotiate your current terms. You will also get a better deal on your loan. At Car Loan Cash Now, we can help you refinance an auto loan even if you have bad credit. With this, you can achieve:
- Lower monthly payments
- Reduced interest rates
- Cash payments (in some cases)
At Car Loan Cash Now we can help you even if you do not qualify for conventional refinancing. We work with a network of some of the best high-risk auto loan lenders in the country.
High-Risk Auto Refinance Lenders and Their Motivations
Refinance lenders understand that many people have been affected by the economy. There are thousands of ‘good’ borrowers who have been forced to max out credit cards. Others have had to declare bankruptcy because of circumstances beyond their control. Often, these people are able to pay back an auto loan but are overlooked by conventional lenders because of their bad rating.
High-risk auto loan lenders offer their services to this group of customers after assessing their ability to pay off their debts. They make their business by assisting those who are desperate for money quickly. To do this, they either provide cash loans or refinance current loans with high interest rates. The majority of high-risk auto loans have exorbitant interest rates of over 20%. Paying them off is a struggle and untrustworthy lenders are known to take advantage.
At Car Loan Cash Now we are dedicated to setting you up with financing institutions that won’t take advantage of your situation. Instead, they can refinance the unfavorable loan you are currently paying off and give you a chance to get back on your feet.
Prepare Your Information for High-Risk Auto Loan Refinancing
To refinance an existing auto loan, you’ll need to provide your potential lender with specific information about your current financial situation. The information you should prepare in advance includes:
- Your current contract
- Information about monthly payments
- Data about the vehicle (mileage, etc.)
- Free credit report from one of the three reporting agencies (Experian, TransUnion, or Equifax)
Note that the latter is optional and only requested in certain situations.
How Does a Car Loan Refinancing Occur?
Unlike with mortgage refinancing, your auto lender does not get the ownership of your loan. They only take control of it after negotiating the terms of release on your behalf.
In essence, the purpose of this shift in control is to give you an advantage. This happens by releasing you from the constricting terms of a high-risk auto loan.
Benefits of Refinancing
- Short-term benefits:
If you have some equity in the car, you might get a bad credit refinance with cash back. This will allow you to get some money immediately.
Note that you might get more cash if you’ve had the vehicle for over eight months.
- Long-term benefits:
A significant reduction in monthly payments and interest will allow you to pay off the loan even if you are in a worse financial situation.
The amount you save will depend on your interest rates, loan duration, and the terms from the refinancing provider. Here is an example of what you can expect if you refinance a high-risk auto loan with a 20% interest rate. The refinance loan amount of $7,000 and up:
- A 36-month lease gets an interest rate of 3.65%
- A 37-48-month lease gets an interest rate of 3.65%
- A 49-60-month lease gets an interest rate of 3.25%
- A 61-72-month lease gets an interest rate of 3.50%
- A 73-84-month lease gets an interest rate of 3.65%
Based on these rates, if you have a loan of $10,000, with the interest rate of 20%, you will pay the lender $2,000 per year. The rate of 3.65% means you’ll only pay $365. The savings you can get with Car Loan Cash Now are huge and they can completely change your situation around.
We only work with high-risk auto lenders who specialize in honest and reasonable loans for bad credit borrowers. If you refinance a high interest car loan with us, you can be sure that you’ll end up in a much better financial position than before.
Co-Signing and Co-Signers for a High-Risk Auto Loan
The Risk of Becoming a Co-Signer
At Car Loan Cash Now we want you to understand that becoming a co-signer does have risks. If you decide to go ahead with this decision, you need to be 100% sure that the person you are signing for will not default on their loan. If this does happen, you are solely responsible for the loan and will have to cover the rest of the payments.
Find out everything you can about their financial situation before you co-sign a high-risk car loan. This will allow you to understand how you could be affected. By taking this responsibility, you might be able to help a person with a bad credit score get an auto loan fast. If you co-sign, you are offering your credit for the lender to examine. The borrower won’t be able to improve their own credit score through this particular loan. A person with a more favorable credit score, who co-signs on a loan can become either co-signer or a co-buyer.
Co-Signing Vs. Co-Borrowing: Similarities and Differences
Whether you are a co-signer or co-borrower you will be responsible if the high-risk borrower cannot meet the credit obligations. The similarities between these two ‘statuses’ include:
- Making the payments if the borrower fails to do so
- Putting your signature on the contract
- Being sent to a collection agent along with the primary borrower
- A revision of your credit by the high-risk auto lender
Whether you are co-signer or co-borrower depends on income. The lender will look at the co- borrower’s income in regards to the primary borrower’s income. There are two key differences between becoming a co-borrower and a co-signer. These are:
- The income of a co-signer cannot be added to the buyer’s income to help them qualify for the loan
- A co- borrowers’s income can be added to that of the borrower’s. This is in case their own doesn’t rate high enough to get approval.
Responsibilities of Co-Borrowers
There are many responsibilities that come with becoming a co-borrower. These include:
- Full financial responsibility for the loan.
If the primary borrower fails to meet the loan terms, you would have to pay it off in full.
- Credit responsibility.
Should your high-risk car loan have a negative result, your credit score will suffer.
Car Loan Cash Now can give you a great alternative to becoming or searching for a co-borrower. We can provide you with a good high-risk auto loan with favorable terms. Our services do not depend on your credit score or whether you can afford to make a large down payment.
Getting a High-Risk Auto Loan with Car Loan Cash Now
Many people can’t get approval for conventional auto loans due to a bad credit score. At Car Loan Cash Now we can offer you an effective solution. With our help, you’ll be able to qualify for a high-risk auto loan in about 60 seconds. Our service will provide you with advice, contacts, and other information to get you the best bad credit auto loan possible.
Don’t Fall for the ‘Advantages’ of High Mileage Car Loans
Many people who can’t get conventional loans try for cheaper, high mileage vehicle loans. These types of cars are often not worth the money. We’ll help you get a high-risk loan that will allow you to buy a high-quality vehicle from a reliable dealer. This way you’ll avoid the risk of expensive repairs for an old car with high mileage.
Credit Scores and Risk Rates
Before you set out on your search for a high-risk auto loan, you should find out what your credit score is. This will allow you to predict the reaction you’ll be likely to get from prospective lenders. According to statistics, over 50% of Americans have negative marks on their credit reports. With this in mind, you don’t need worry if you find out your credit score is less than squeaky clean.
Credit reports are provided by three major organizations. These are Equifax, TransUnion, and Experian. They use a special formula to assess your credit score and calculate it.
Lenders assess the risk levels of a loan based on the following chart:
- Very Low Risk: 726-850
- Low Risk: 700-725
- Medium Risk: 626-699
- High-risk: 551-625
- Very High-risk: 350-550
The vast majority of conventional lenders won’t give you an approval if your score is under 550. If they do, the interest rates are normally very high. At Car Loan Cash Now, we deal with a specific group of institutions. These specialize in financing people with bad credit, and the terms they offer are reasonable.
How Applying for a High-Risk Auto Loan Could Ruin Your Credit Score
The best way to get a high-risk auto loan is to apply through different lenders. You can then compare their offers and choose the best one for you. But if you do this, you might damage your credit score. Every time you file an application with a lender, they start an inquiry. If too many inquiries of your credit file are active during a short period of time, your score may go down.
When you search for a high-risk car loan through Car Loan Cash Now, you avoid damaging your credit rating further. Our loan network center will process your application through our group of leading high-risk lenders. Once the review is complete, the chosen financing institution will activate an inquiry before giving you approval. With this, only one credit check is activated, leaving your credit rating as it was when you started your search.
Conclusion: How Do I Find the Best High-Risk Auto Loan?
There are many issues you could face when trying to find a high-risk car loan. At Car Loan Cash Now we will help make your search more efficient and straight forward. When you apply for this kind of loan, you should prepare yourself to pay higher interest rates or make a bigger down payment. These are unavoidable laybacks as the lenders must protect their investment when they take bigger risks.
But, there are a variety of great car loans for bad credit borrowers available on the market. With our help, you will be able to find the best one for you and get approval quickly.
Contact our agents at Car Loan Cash Now today and start your journey towards getting a high risk auto loan regardless of your credit rating.