Auto Loans In Todays Economy

Anyone who has a high credit score will never really need to worry about getting any type of loan. Most banks will fall all over themselves to give you a loan. Unfortunately many people today, sometimes through no fault of their own, have some dings on their credit rating which will make it harder to qualify for a loan. But, even so, there is hope of getting auto loans in todays economy.

If you have some blemishes it will be harder and you will pay more, there is really nothing you can do about that until you’ve cleared up the issues on your credit report. But, getting auto loans in todays economy can actually help you improve your credit score as long as you make all your payments on time.

For that reason, it’s very important that you don’t overspend on a new, or used, car. If your payment is at the top of what you can afford and you end up with an unexpected expense, you will have trouble making your payments and your credit score will go even lower.

Make sure that you figure out your monthly budget before you go off to your local car dealer. It will be tempting to get the absolute best car you can get approved for, but if you do you may end up having problems. It’s better to get a car at the lower end of your budget so you have some wiggle room if you have any unexpected financial troubles.

Of course, if you are able to wait you can save and pay cash for a car, true it may not be a really nice car, but it may be able to get you from point A to point B. For example, several years ago I was struggling and I had to pay cash for a car. I bought a car with over 140,000 miles on it and paid ,400.

I ended up keeping that car for several years and finally sold it for 0 with 265,000 miles on it when I sold it! Not bad, huh?

You can also try to go to a local bank or credit union. Often they will be more forgiving then the large national banks. If you’ve been a good customer of the bank and they know you and you can explain any dings on your credit (maybe due to a layoff or a health problem) they will be more likely to still give you a loan.

You may also want to try a “buy here, pay here” type of place. Of course you have to be warned that the vehicle may not be as nice or dependable as you might get elsewhere and you will pay through the nose for your interest payment.

Getting auto loans in todays economy if your credit is mediocre or poor is definitely more of a challenge than in years past, but it is not impossible. Do all you can before you go to your bank to improve your credit rating. Be prepared to have a large down payment and be willing to pay more in interest. It’s tough but it is possible. Be prepared to spend quite a bit of time finding a bank that will approve you.
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