1.New auto loan
A new auto loan is any funding for any new car purchased from a franchised dealership. A franchised dealership sells vehicles for an auto manufacturer Nissan or GM. New auto loans generally have lower interest rate than used auto loans, typically a few points lower.
A used auto loan is any funding for a used vehicle from a franchised dealership. A franchised dealership sells vehicles for an auto manufacturer such as Nissan, Ford, GM, Chrysler, Volvo, Toyota, Honda, etc. Used auto loans generally have higher interest rates than new auto loans, typically a few points higher.
A private party auto loan is any funding for a used vehicle from a private individual. This includes vehicles where the private individual owns the vehicle free & clear and if the private-party still has an outstanding loan balance.
An auto refinance loan is funding used to finance your existing vehicle loan.
You can get an auto loan from several sources: your own savings, local banks, credit unions, family, home equity loans, local dealerships, and online auto lenders .
Each one can be your source of funding, each one has its unique advantages but it all depends upon your circumstances at the moment.
The most important factor that determines if you can obtain an auto finance loan is how well you had managed your credit . When it comes to your credit history, everything is entirely on you.
You make or break it. If you happen to have been irresponsible with it, you can improve your bad credit by paying your bills on time, and not overextending yourself when it comes to loans and credit cards.
The table below illustrates how your APR (Annual Percentage Rate) rises when your FICO (an acronym for Fair Isaac Corporation) score falls below 690 and 620 for used auto loans. You can get an auto finance loan easier with a high FICO score.
The table below illustrates how your APR rises when your FICO score falls below 620 for new auto loans . You will have difficulty obtaining an auto finance loan with a low FICO score.
The FICO credit score range is between 300 and 850, 300 being very bad and hopeless since no
lender in his right mind will lend you any money at that score and 850 being very credit worthy, with lenders fighting for your auto financing loan.
If your credit score is below 680 and you are not getting approved for a loan, there are auto financing sites that cater specifically for people with bad credit. They are called poor credit auto loan. Even if you have previous bankruptcy, tax liens, or bad credit, as long as your credit score is 525 or above, and bankruptcies have been discharged, your chances are good.
For Borrowers With Bad Credit
If you have bad credit, try Web2Carz.com
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