Introduction
There are numerous lenders who provide credit auto loans to people in need. Generally, you must be above 18 years of age to qualify for a loan. The flip side is that young drivers struggle to get loans since they are considered risky. Most accidents are caused by people below 25 years of age and 1 in every 5 young drives will cause an accident in their first year of driving. The major stumbling block facing standing in the way of applicants and credit auto loans is credit history. According to reports by the credit bureau, 25 percent of all Americans have FICO scores of below 600. Your credit history will play a major part when the lender is assessing whether to grant you a loan or not.
History
Generally, interest rates for people with low scores are higher than mainstream loans. It the price you pay for having less than perfect scores. The good thing is that thanks to comparison sites you can get competitive credit auto loans rates out there. If you are looking for auto loans, the following tips will come in handy: Always check your credit scores; it is wise to check your credit rating yearly. You can check this from the three major credit bureaus which include Experian, TransUnion and Equifax. Here you will get to view your scores and check if there are any errors and omissions. Ensure that the errors are rectified before you begin your loan application process. A minor mistake could translate to unnecessarily high rates of interest. Generally, a score of 700 pints and above is considered good, below 500 is poor.
Features
Before you settle on a particular dealer it is important to compare deals from various dealers. Also go for a dealer who considers other factors not just credit scores. Your monthly income and employment record will be a determinant of whether your loan application will be approved. Comparing rates will help you get the best deal on credit auto loans. If you have a poor score, it is better to look for a consigner who has an above average credit rating. A consigner can either be a family or friend. You can also apply for a joint loan with someone else who has a perfect score. The loan provider will be inclined to offer you a lower rate. The major challenge may be finding someone willing to be your consigner or have joint loan with you.
Tips and comments
Once you have applied for an auto loan and are able to make your monthly payments on time for a period of six months you can consider refinancing, this will reduce your interest rates by a significant amount. If you opt for this option, you must ensure that you keep building your scores to increase the confidence of lenders in advancing you credit auto loans. Age is another factor that auto loan companies will consider when you apply for a credit auto loan. Generally, you must demonstrate that you are a good driver having a DUI charge will hurt your efforts for getting the best credit auto loans.
