Bad Credit Auto Loans: How to Get a Car Loan After Repossession
1. Pay the Balance: Once the auto loan lender repossess a car, the automobile is sent to an auction house, and the proceeds payoff the vehicle loan. If the automobile sells for less than the loan balance, the original borrower must pay the difference. In many cases, borrowers don't have extra cash to pay the difference, and lenders report the repossession and the delinquent balance to the credit bureaus. If you want to finance a new car shortly following a repossession, it helps to develop a plan that will enable you to pay the balance and salvage your credit.
2. Wait at Least One - Two Years: Financing a car immediately following a repossession is a bad idea for several years. For starters, the lender will charge an enormous interest rate, which will increase monthly payments. If you need transportation and do not have enough available funds to pay cash for a car, financing is the only alternative. However, if possible, wait until your credit improves. There are several ways to quickly improve your credit. You could open new lines of credit and payoff the balance each month. This tactic can increase a low credit score within a short amount of time. Furthermore, paying bills on time and reducing debts is an effective way to improve credit and get approved for a car loan. Once your credit score is high again, some auto loan lenders will excuse the repossession and approve you for a reasonable interest rate.
3. "Buy Here, Pay Here" Car Dealers: After a repossession, it is difficult to obtain a loan from a prime lender. Even if these lenders approve your loan request, you'll pay hefty fees. If looking for a sub prime auto loan, consider a small privately owned car dealerships. These car dealers may provide easy financing, and offer low, comparative rates to persons with bad credit, recent bankruptcy, and repossession.
Published by V.C. Higuera
Freelance personal finance and health writer from Chesapeake, VA View profile
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7 Comments
Post a CommentI don't know what happened to my life. But I don't see myself getting a decent job anytime soon or anything else. So from now on I'll drive pieces of junk that I can afford to pay, when I am able to afford it again. I will have to pay and cheat to pass the smog check and stuff... and that's the new reality some of us have to face. Oh, well.
can i refinance same car with different lender after car was repossessed (just today)?
can i refinance same car with different lender after car was repossessed (just today)?
Your site offered me with so much information. Unfortunately, I got the information a day to late. I applied for a bad credit loan with a company called Universal Loans with Jordan Myers. I sent this man my taxes for the last two years, copy of driver’s license, proof of child support payments, EIN #, etc. Everything one would need to open fraud accounts despite bad credit. Thanks for the info, in the process of buying a car and found this very informative!!!!
http://www.cheapoloan.com
Loan Company
If you guys need a place that is easy to get a car loan from just go to www.drivercarloan.com. I just got a loan from there and my credit is horrible.
hi my name is heather i let u knwo lexington law firm did take care of my credits and they deducted my monthly for take care of credit reports so they told me i should can get car in 30 to 45 days so lexington law firm start take care of my credit report since feb 15th 2009 ... if u can give me chance and i will show u payment on time i dont care if u give me higher payment car no problem... just let me know asap
still have car in repo statis can i refinace