If you have poor credit, you may think that a car loan is out of your reach, but all that has changed in 2013. While it is true that many lending companies shy away from approving car loans for people with bad credit, there are other companies more than willing to provide you with a loan, no matter how bad your credit score is.
There are two main options for getting a car loan with poor credit: regular car loans (loans taken out to purchase a new or used car) and car title loans (which is using your car’s title as collateral to secure a loan for other purposes).
If you’re looking to raise funds for any reason, and are in need of a car title loan, then contact Car Capital Financial today. We’ve provided safe, reliable and affordable car title loans to California residents for over 15 years, and we’re ready to help you right now. Call us at 1-888-500-9887 for details.
Alternatively, read on to discover the differences between these two types of loans and find out how you can apply for each of them:
Car Loans for People with Poor Credit
Virtually everyone who buys a car has to rely on a car loan to finance the high price tag. And although many companies won’t lend to people with poor credit scores, there are others who are more than willing to provide poor credit car loans.
During the recession years (especially 2007 to 2010), many car loan companies shut out poor credit borrowers because the risk of lending to them was deemed to be too high, but in 2012 and now 2013, it appears to have become much easier to get a car loan with poor credit.
In fact, in 2012 the average credit score required for a new car loan fell by six points (to 760) while the score for a used vehicle loan fell four points (to 659).
While these are still far from poor credit score range, the dropping average credit score signals that lenders are more willing to provide credit to those with lower credit ratings and that 2013 could prove to be a year with far easier access to liquidity.
Maximizing Your Chances
Here are some simple ways you can boost your chances of being awarded a car loan if you have a poor credit score:
- Explain Your Situation – When you first initiate talks with a car loan company, be open about your credit score and explain how it got to such a low rating. Perhaps it is due to just one major unforeseen financial emergency, like an unexpected medical problem, or perhaps it was something you knew you had to do to turn your finances around, like declare bankruptcy, allow a car to be repossessed, or even let your home mortgage slip into foreclosure status. Whatever the reason, explaining the situation to the loan company may let them be more lenient in both approving you for a loan and offering you a more reasonable interest rate. Not saying anything will lead them to assume the worst, and could shut you out from access to liquidity.
- Shop Around – If you need a car loan but have poor credit, you will definitely want to shop around in order to secure the most reasonable interest rate and best possible loan terms and conditions. Some lenders will try to rip you off with exuberantly high interest rates, knowing that you are less likely to look for competing offers since you’ll have a harder time of getting approved, but other lenders may be much more open to offering you similar conditions and interest rates to those that they provide to borrowers with good credit scores. Let’s face it, a lot of us have gone through some troubling financing experiences in the past couple years, and if anyone is aware of that fact, it’s definitely the lenders. Get in touch with at least three or four car loan companies before you sign the final deal, as this is the only way to be sure that you’re securing the best possible deal for yourself.
- Try to Boost Your Credit Score – The best way to get a decent car loan if you have bad credit is to try and boost your credit score as much as possible before you begin to shop around for a loan. Even if you can only boost it up a couple of points, this could potentially make a world of difference. Look at exactly why you got such a poor credit score rating in the first place, and try to correct this if you can. Perhaps there’s a massive medical bill you need to pay off or a student loan payment that’s past due. Whatever it is, contact the credit bureau and your creditors to see if you can work out a restructured payment plan with them so that you can get things in order and avoid any future dings. If you can get your previous liabilities sorted out and begin to keep up with their monthly installment payments, you should see your credit score begin to improve, which in turn should then allow you to get a better deal on your car loan.
If you want to buy a new or used car, getting a car loan is likely your best financing option, and the above tips should be able to help you secure a loan regardless of your credit score problems.
However, if you have a bad credit score and need a loan, but aren’t necessarily looking to use it to purchase a car, then you may want to consider getting a car title loan, which allows you to borrow money that you can use for any sort of expense.
Car Title Loans
If you typed “car loans with poor credit” into Google, it’s likely that you encountered a variety of lenders providing new or used car loans to people with poor credit, but you probably also saw a slew of car title loan companies as well. Car title loan lenders offer something slightly different, but every bit as effective as traditional lenders.
Car title loans let you raise money for any purchase or expense by using the collateral value of your car, without having to actually sell or pawn it off. Title loans use the equity of your car’s title (also referred to as a “pink slip”) as collateral to get you a secured personal loan, and they are extremely popular with people who have poor credit scores, since they often don’t require any sort of credit check.
The way it works is that a title loan company takes your car’s title in their name in exchange for providing you with a cash loan based on the value of your car. They’ll offer you lending terms and conditions like a traditional lender, with a set interest rate, monthly payment schedule and a total term length that you have to repay the loan in full, and will then return the title to your name once you’ve fully paid off your loan.
One of the benefits to taking out a car title loan is that some lenders will allow you to drive your car as much as you want while you make loan repayments, so you don’t have to lose the freedom of driving and using your car in any way.
Another key benefit is that title loans are one of the only safe forms of no credit loans in existence. Unlike neighborhood loans and cash advances, they aren’t structured to keep you in debt forever, but are actually meant to be paid off.
Even if you have an absolutely terribly credit score, it won’t affect your chances of getting approved for a car title loan, and in some cases, it may not even affect the terms and conditions of your loan. Title loans are issued based on your ability to repay the loan.
About Car Capital Financial
If you are interested in a car title loan, contact Car Capital Financial today. We are a leading Southern California title loans company with over 15 years in the business, and we’ve helped thousands of people just like you get access to the cash they need.
Your poor credit score won’t affect you ability to get a loan from us, it won’t change the terms and conditions with your loan in any way whatsoever, and we can provide you with the funds you want in as little as 30 minutes from receiving your phone call.
If you need money fast, look no further than Car Capital Financial. Call us now at 1-888-500-9887 to get your cash today!