Learn More about Subprime Auto Loans
A Credit Article Contributed by Brandie King
Subprime Auto Loan: What is It?
A subprime auto loan is also known as a bad credit auto loan. This is the type of auto loan that people with poor credit normally have to make due with. These types of loans involve more requirements and restrictions than a normal auto loan, and have higher than normal interest rates. The up side to having this type of auto loan is that getting one and making your payments on time can help to improve your credit history.
Subprime Auto Loan: What to Watch out for When Shopping for One
The problem that comes up when considering a subprime auto loan is that there are a lot of unethical companies scumming around trying to provide them. Always go on their reputation when considering a company to get a subprime auto loan and watch out for small time companies. Make sure to choose an auto lending company that is very well known, such as Capital One or eLoan.
Things that you should watch out for are "special deals" for people with no or poor credit and dealers that offer "pre computed" car loans. Some lenders and dealerships will offer deals to those with poor credit that will usually involve jacked up car prices, unbelievable down payments, and sky high interest rates.
Subprime Auto Loan: How to Avoid Having to Get a Subprime Auto Loan
The best possible thing that you can do to avoid having to get a subprime auto loan is to do some repairing on your credit before trying to apply for an auto loan. Here are a few ideas on how you can improve your credit rating, which will in turn let you get a better auto loan with a better interest rate and down payment.
1. Order your credit reports from all three major credit bureaus. http://www.experian.com, http://www.equifax.com, http://www.transunion.com
2. Examine your credit reports for errors, inaccuracies, and suspicious activity. Then write three letters detailing the errors you found and mail one to each of the three major credit bureaus. There is a good possibility that your credit reports will be different for each of the three bureaus and that the letters for each will therefore also be different.
3. If you have a simply unmanageable amount of debt and there's no way you can pay it all off consider taking out a home equity loan on your house. This is a form of debt consolidation because you will be using the home equity loan to pay off all of your outstanding debts and will only have one single payment each month: the one on your home equity loan.
4. Consider taking the balances on all of your high interest rate cards and transferring them to a low interest rate card. Once again this is a form of debt consolidation, but will drastically reduce the amount you end up paying and will allow you to have only one payment each month.
