With several companies offering bad credit loans, more and more consumers with bad credit are given a new opportunity to score auto loans. This is according to a recent report from Experian Automotive that states that if you have been dreaming to acquire auto loans but your bad credit standing stops you, then you might just score one today through bad credit loans.
“A few years ago, it could have been much more difficult to get an auto loan. A lot of lenders who specialize in subprime financing might not even have had the funds to lend,” states Melinda Zabritski, Experian Automotive’s director for automotive credit.
Recent Changes in Bad Credit Loans
According to a report by Experian Automotive, more and more lenders are also offering auto loans to people with bad credit. During the first three months of 2012, for instance, auto loans to consumers with credit scores that range between 679 and 550 or below increased by about 11%. Also, with bad credit loans, consumers get to acquire bigger loans, with an average loan amount of more or less $26,000 for new vehicles and $17,000 for used vehicles during the first few months of 2012. Importantly, despite the fact that bad credit loans offer a generally more expensive interest rate than the traditional type of lending, lenders of these loans have also started to offer lower interest rate. During this same period, interest rate for new vehicles starts at 4.56% and for used vehicles 9.02%.
All these incredible changes in the industry of bad credit loans apparently are a result of credit consumers being responsible enough to pay back their bad credit loans according to what was agreed. In fact, a report reveals that late payments of bad credit loans dropped by 7.6% for loans that have been late for 30 days and 12.1% for those that have been late for 60 days. “When losses are low, lenders are able to do more lending and have better rates,” Zabritski adds.
Get the Best Deal on Bad Credit Loans
While it is easier these days to acquire auto loans through bad credit loans, Linda Sherry, the director of national priorities for Consumer Action, warns consumers about these loans. She says, “It’s a good idea to see where you stand before you go car shopping. See what you might be offered in the marketplace.”
Also, as a responsible credit consumer, you have to know where your credit stands before you start shopping for cars. Your credit score can be acquired by contacting any of the country’s major credit bureaus, Experian, Equifax, and TransUnion.
Getting the best deal online is easy if you know what to look for and how to look for them. That being said, whether you choose to loan a new or a used vehicle, it remains best to do research about bad credit loan lenders and compare their different offers, take a closer look at the car, and importantly gauge your ability to pay back the loan. Doing so will not just help you score the best deal on car loan, but will also save you from future financial difficulties.