BUY A CAR WITH BAD CREDIT

Do you want to Buy a Car with Bad Credit then go to http://www.autoloanslocators.com

Following are some of the FAQ's that may solve your problem:

Q:
"Hello, I have found the vehicle that I wish to purchase, but am having trouble securing an bad credit auto loan if not purchasing from a franchise dealership. The dealer that I wish to buy from is licensed, but it is a private dealership. Can you help?"

A:
The lenders within our network are indirect lenders. That is to say they only provide loans through their dealer partners. In your case we would be limited to the lenders available to the independent dealership that you mentioned.

Q:
"I have a question regarding a local dealer. I have a car picked out but I'm not sure how your loan process works. If I get approved do I have to use a specific dealer or can I go to the one I already am interested in?"

A:
We work within a network of indirect lenders. Your local dealer would actually be the one processing your loan. If you are looking for a lender that would provide funds for you to purchase from the specific dealer you mentioned you should search for a direct lender or let the specific dealer process your loan. We have not had success finding a direct lender that does a decent job with bad credit financing nor have we had luck convincing dealers outside of our network to sign up with the indirect lenders that do a good job lending to people with credit problems.

Q:
"I would like to know what credit reporting agency you use to pull credit reports. Also, is there a minimum beacon score you must have to qualify for a loan? I do not want to pull my credit report if not necessary."

A:
The authorized dealer in your area will generate a credit inquiry to determine which lender programs you qualify for. The reporting agency used varies by location. Also, the lender that your application is submitted to will also generate an inquiry. Most lenders now use a service that merges all three major credit reports. The authorized dealer in your area has access to lenders that ignore the credit score on the credit report. If your score is less than 525 (average), however, your auto loan request would be limited to these lenders.

Q:
"Can a person who has filed for bankruptcy, still get an auto loan? And if so, how long must a person wait after filing chapter 7 before they can get an auto?"

A:
In some cases you are eligible for financing after the initial meeting of your creditors (341 meeting, first court date). In every case you are eligible immediately after the bankruptcy is discharged.

Q:
"A dealer called me to say that I could be financed there. Are my choices limited to one dealer? I have a bankruptcy discharged in May and want to reestablish credit but do not want more queries on report."

A:
For quality control and monitoring we limit the number of dealers in each area. We do have multiple dealers in most major metro markets. In either case your loan request is processed by the closest dealer. In the past we listed the dealerships name, phone number, and contact person on the site. Unfortunately we had to remove them after receiving numerous complaints from our special finance managers within the dealerships that they were receiving far to many telemarketing calls from online marketing companies.

Q:
"I would like to apply for a loan for a purchase at a local non-franchised dealer. Will this be a problem?"

A:
If you apply with us we cannot process you loan though every car dealer. Our dealer network is limited to maintain the quality of our service. Provide us with the name of the dealership and we'll let you know if they are part of our network. Nationwide, however, we only have a handful of independent dealers within our network.

Q:
"My credit score is 534 with a voluntary repo. I will have a co signer with a cosigner with a score of 550. I am willing to put money down but need 30 days to come up with it. I need to get the vehicle today."

A:
The information provided is not enough to determine if you would qualify for a loan. As far as the down payment, differed down payments (30 days) have to be disclosed on the finance contract to comply with the Truth in Lending Act. If it is not it is considered an attempt to deceive the lender. Most lenders do not allow differed down payments. Based on the information you provided I would guess that you would not qualify for a zero down payment program.

Q:
"I wanted to know if you do in home financing and if so what are the requirements. I don't have good credit."

A:
We do not originate loans. Most lenders that provide financing for people with sub-prime credit are indirect lenders and only purchase finance contracts from licensed auto dealers. There is not a lending program that offers Direct Loans to people with high risk credit that we recommend.

Q:
"Do you have any no money down loans that would require not even tags and taxes to be given at time of purchase? My son is 18 and has no credit and needs a car but we don't really have tax or tag money."

A:
There are no money down programs. It is unlikely that your son would qualify by himself. If he applies on his own he would most likely fall into a First Time Buyer program. Most FTB programs require at least 15% of the sale price, not including taxes. If a parent with fair credit was listed as a co-buyer you should qualify for a zero down program.

Q:
"Do you finance 100% on a new vehicle? I don't have money for a down payment."

A:
There are zero down payment lending programs. You may also qualify for lending programs that require a down payment if you are purchasing a new car with a rebate or you have a trade in, regardless of it's condition.

Q:
"We had a discharged bankruptcy last August. How to I find dealerships that help people with past credit problems. I know our credit has improved a lot since last year."

A:
You can apply online and your application will be processed by a dealership in your area that specializes in financing after bankruptcy. If you would like to apply directly with the dealership please email us your zip code and we will send you the contact information for the local dealer.

AUTO LOAN FAQ

Why is a credit profile important ?

To the financier your credit profile is the most important factor he will consider before funding you. Your credit profile tells him if you are able to and intend to pay back the loan to him.

What are the specific components of my credit profile ?

The components are age, profession or occupation, income and financials, previous credit history and your home, ie, if you live in a rented accommodation or in your own home.

What can I do if my credit profile does not match the financier's requirements ?

If your credit profile does not match the financier's requirement you can strengthen it by bringing in a co-applicant or guarantor who would be able to match the requirement.

How to improve your credit profile ?

If you are salaried and over 60 years of age it is unlikely that you will be financed based only on your profile, most financiers would insist that you bring an additional guarantor or co-applicant whose age is less than 60. It would be better for you to take one of your immediate relatives (son, husband, wife, daughter ) as co-applicant. The age limit for self employed is 65 years.

If you are self employed and your income is between Rs. 45,000 p.a. and Rs. 60,000 p.a., it is unlikely that you will be financed based only on your profile. Most financiers would insist that you bring an additional guarantor or co-applicant whose income added with yours is greater than Rs. 60,000 p.a. It would be better for you to take one of your immediate relatives (son, husband, wife, daughter ) as co-applicant. If you are salaried the minimum income is normally Rs. 100,000 p.a.

If you have been in employment for less than 1 year and total number of years in service is less than 3 years it is unlikely that you will be financed based only on your profile. Most financiers would insist that you bring an additional guarantor or co- applicant whose years in service match the requirement. It would be better for you to take one of your immediate relatives (son, husband, wife, daughter ) as co-applicant. If you are salaried the minimum income is normally Rs. 100,000 p.a.

How much finance are you eligible for ?

The quantum of finance you can get depends on your income, your ability to repay and the financier's LTV norms for the car.

What documents do I need to establish proof of income ?

For income, most financiers look at your IT returns for the last two years. Financiers also look at the nature of income. Some of them do not consider speculative income (especially from the stock market), rental or agricultural income. Some financiers discount such income by up to 50% in their workings.

What are the pre-conditions on the amount I earn and its relation to the amount of finance I can usually get ?

Generally, if you have an income of Rs. 60,000 p.a. not including speculative / non- recurring income, most financiers would fund you 80 % - 90 % of the value of a small car. Similarly, if you have an income of Rs 100,000 p.a., again, not including speculative / non-recurring income, most financiers would fund you 75 % - 85 % of a premium car.

Do loans previously taken play a role in determining the amount of finance I can get now ?

Yes they do. Fixed obligations such as an earlier loan or certain deductions in the case of salaried people are normally removed from the income by most financiers before determining the finance amount.

What are Negative Areas and Negative Credit Profiles ?

Most financiers have an internal list of geographical areas and professions / business/ companies that are created based on their previous credit experience. Loans for customers from such areas or with such profiles may be rejected or may be more closely scrutinised before approval.

Can I get car finance without submission of income documents ?

Yes, you can, under the No Income Proof scheme offered by some financiers.

Can I get finance for accessories ?

Most financiers do not finance accessories other than those which are factory fitted like air-conditioners. Some may fund music systems and such other expensive accessories.

Can I get finance for Insurance and Registration ?

Most financiers do not fund insurance and registration. The LTV is worked out on the ex-showroom price of the car and does not include insurance and registration charges.

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Interest Rate

What is the difference between a Flat interest rate and a Reducing Balance interest rate ?

Take a simple example. Suppose you have taken a loan of Rs. 5 Lakh at 10% interest. You repay Rs. 25,000 in the first instalment. If the 10% interest continues to be applicable on Rs. 5 lakh after your first repayment, you are paying a "Flat Interest Rate". But, if 10% interest is applicable now on Rs 4.75 Lakh, you are paying a "Reduced Balance Interest Rate".

What is a 0% interest scheme ?

In this scheme you are not charged any interest. You only pay back the principal amount. However, be careful to check out the hidden costs under such schemes. There are some disadvantages in this scheme - the amounts financed are low and the tenure is short.

Why is the interest rate higher for a used car ?

A used car carries a higher Asset Risk than a new car. Therefore, interest rates on used car rates are higher.

Is it better to go to my current financier ?

Yes, if you have a very good repayment record for an earlier transaction, you are most likely to get a lower lending rate. Even your loan processing could be faster. However, do check out some competitive offers before taking a final decision.

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Repayments

What is a default ?

Repeated prolonged delays and dishonoured cheques are deemed to be defaults in repaying your loan. Most financiers would expect you to turn in the asset on request, failing which they may seize your car, after serving you proper notice.

What happens if my cheque bounces ?

Dishonouring a cheque is a criminal offence. Legal proceedings may be initiated against you. Your credit profile could be seriously damaged.

What happens if I delay some instalments ?

You are advised not to delay your instalments because frequent delays may affect your credit profile and might make further borrowing difficult and costly. However, under rare circumstances, if you delay an instalment, most financiers would charge you a delayed payment charge, which could be as high as 3 %, compounded monthly. This could be twice the rate at which you borrowed.

Can I get a temporary relief from paying my instalments ?

Yes, in some cases you can, if you inform your financier in advance. This should only be for a few days and you will have to pay delayed payment charges.

Can I Pre-close or Pre-pay a loan ?

Yes, you can, but conditions apply. Please refer the section on Pre-Closure.

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Insurance

What happens if the car meets with an accident ?

In the event of an accident you will have to inform your insurance company /agent. They will send an assessor to assess the damage to the car. The insurance company will process your claim and pay it directly to the financier, unless you have taken an NOC from the financier, in which case the payment will be made by the insurance company in your favour. The financier will normally give an NOC if you are regular in your payments. In case of a complete loss, the financier would receive the payment directly from the insurance company.

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General

What is an Exchange Scheme ?

Some dealers may offer you an exchange scheme whereby your existing car can be upgraded to a new one. The dealer will purchase your car at a price depending on the model, year and the condition of the car. The value of your old car is then adjusted against the purchase price of the new car. You could also get the balance amount financed.

Can I sell the car during the tenure of the finance contract ?

No, you cannot sell the car unless you repay the loan. An NOC is required from the financier before you can sell the car.

What happens when the loan is fully paid off ?

After the loan has been fully paid off, the financier will issue Form 35 with a covering letter (NOC) to the RTO for cancelling their name from the R/C book. A similar NOC will be issued to the insurance company requesting for the deletion of their name from the policy.

What is De-Dupe ?

Most financiers have compiled a list of defaulters, their own, as well as from other available sources. Details of all clients are run through this list to check if the same client had applied for a loan and if yes, the file is rejected.