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What To Expect For Car Loans With Bad Credit And No Money Down

August 18, 2011

Car loans with bad credit and no money down do exist, but the terms will obviously be somewhat different than those for a car loan with good credit or money down. Here's what you can expect if you choose to obtain a car loan with bad credit and no money down.

1) SMALLER LOAN. Until your credit history improves, you may find that it is necessary to settle for a more modest vehicle. Lenders who are willing to offer car loans with bad credit and no money down are more likely to do so if the loan is small. For this reason, a used car loan is more likely than a new car loan, and the car will likely be more than a few years old.

2) HIGHER INTEREST RATE. It's no secret that low interest rates are the reward for customers who have worked hard to keep their credit rating good. Similarly, a car loan with bad credit will almost definitely have a higher interest rate. However, since the amount being borrowed will generally be less, the payments could still be affordable. Over time, as you prove that you can make payments on time, some lenders will permit you to refinance to a lower interest rate, which of course will bring the payments down even further.

3) PROOF OF RESIDENCE AND EMPLOYMENT. Lenders who work with bad credit car loans and no money down of course will require proof that you have a source of income. In addition, your recent history on rental payments or mortgage payments can also give an idea of how likely you are to keep up with car loan payments.

Getting a car loan with bad credit and no money down is more difficult but not impossible, especially if you work with Carloans.com. We have a network of hundreds of lenders and will match you up to those that are best for your situation. Fill out an application right now to get started!

Author: CarLoans.com Staff


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