If you have previous credit problems on your record and need to
purchase a car, you may need to apply for what is called a bad
credit used car loan. A bad credit used car loan will allow you
to purchase a vehicle, but you will usually be expected to pay
it off in a shorter time frame and at a higher rate of interest.
Today many traditional car lenders are offering extended payment
terms; some allow you up to seven years to pay off the vehicle.
A bad credit used car loan usually must be repaid within a
48-month time frame. Since the vehicle you are buying is used
and your amount financed will be less, the lender expects the
loan to be paid off in a shorter amount of time.
Research the Prices of Used Cars
Before making an offer on a used car, you should research the
average price value. By doing this you will know if a dealer has
inflated the price in order to make an excessive profit. You
will want to make sure you are purchasing the car from a
There are a lot of companies who do most of their business with
customers who have less than perfect credit scores. Some of
these dealers may try to take advantage of customers. Just
because you have had credit problems in the past, this does not
mean you should pay an outrageous amount in interest rates or
Shop Online For a Lender
Online auto loan lenders make applying for a loan quick and
convenient. By applying online you will have access to several
lenders and their rates. Applications for online auto loans can
be filled out in just a short time and the approval is almost
always granted the same day.
An important point to remember when applying for a used car loan
on bad credit is that banks have limits to how old of a vehicle
you can purchase. The majority of banks will not grant loans to
vehicles more than four or five years old. You should also try
to make a substantial down payment when purchasing a used car.
This will lower both the interest rate you are charged and the
length of the loan.
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