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.
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 financing 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 financing 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 financing 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
At 1-800 FreshStart!
, they help individuals with bad credit, no credit, bankruptcies and other problems get the car loans they deserve. Their network of hundreds of auto dealerships has helped thousands of people get into the car of their dreams.
will work for you. Their one-minute application is easy to complete, and there is no cost or obligation. Your information will be instantly accepted for review, and a representative will contact you shortly.
You should be working for at least 6 months and have no bad credit in the last 6 months. You can expect to pay more APR than someone with good credit, but this can help re-establish credit for you. After a few months of paying on time, you may be able to auto refinance to a lower APR.