Customers with poor credit often face a number of obstacles to have their car loan applications approved. They try places such as GMAC Auto Loans, Chase Auto Loans and/or GMAC Auto Financing only to get turned down in their time of need. However, it is possible to overcome these hurdles if you are aware of certain basic requirements to qualify for auto loans regardless of your credit score. Beacon Auto Loans has an enviable reputation of helping thousands of bad credit applicants with their best auto loan rate online. As a result, we are fully aware of the requirements that most of the sub-prime lenders look for in online car financing from their customers. Though we can assure super fast auto loans for almost all applicants and help you find out how much you can borrow through our free auto loan calculator there is no denying that you will have to meet certain conditions even while dealing with the non prime lenders when looking to get a good credit auto loan rate.
What to think about before getting your auto loan
Before deciding to send your auto loan application, you must actively be aware of at least one of your credit scores. It is important for all applicants to know that most sub-prime auto lenders prefer a FICO score within the range of 500 and 640. Scores exceeding 640 and 720 are considered to be near prime and prime respectively. Though the near prime customers can avail loan from sub-prime lenders, they may approach banks, captive finance organizations, or credit unions for a better interest rate. You must also know that it is extremely helpful to have a credit history unless you are too young for that. In general, most lenders have a minimum requirement of 3 years’ credit history from all applicants. At least one previous auto loan is considered to be helpful, too.
Monthly income requirement of the applicants tend to vary across the lending companies. However, with most of them, the gross minimum earning required before taxes to qualify is between $1,500 and $1,800. The applicants with a higher earning generally have a larger selection of vehicles to choose from. After meeting the income requirements, the lenders work out the debt-to-earnings ratio by comparing your earnings and debts. The formula typically used by most lenders requires the total debt of an applicant to be less than 40% to 50% of their gross earning. Also, a monthly vehicle payment of less than 15% to 20% of total income is preferred by the lenders.
In case you are planning to apply for an auto loan with bad credit, you must be prepared to make a down payment. Most lenders require a minimum payment of $1000 down or 10 percent. You can enhance the chances of your loan approval by making a larger down payment. It is also important to know that most lenders only allow one car loan per applicant. Therefore, you may have to trade it in or pay it off, in case you are already financing a vehicle. Other requirements for a favorable outcome include long job tenure, no bankruptcy, and an accurately filled up form.
Beacon can get you the Auto Loan you deserve
Beacon Auto Loans is undoubtedly the most recommendable platform for you to start your search for a poor credit car loan and to get you the absolute best auto loan rate. Your chance to qualify for the same low auto loan rates improves significantly simply by using our service.