New Start Auto Loans

If I Take Advantage Of The Making Home Affordable Refinancing Program, Will That Make It Hard To Get A Car Loan?

admin — Fri, 27 Aug 2010 05:43:41 +0000

As far as I can see, the “Making Home Affordable Refinancing Program or HAMP, is intended to allow mortgage holders to refinance their mortgage by missing several payments or only paying a portion of the balance to bring the mortgage to a near default stage. Once these homeowners are in that magical near default stage, the lenders, by way of the Making Home Affordable Refinancing Program are highly encourage by Obama’s new policies to refinance at a much lower rate. The result is a very lower interest rate reward for the homeowner.

Despite a bad taste in my mouth for the idea, the program can get you into a better interest rate and a lower monthly payment. So everything is great then right? Not so fast. If you suspected that this may have other consequences you are correct. A late mortgage payment is a giant problem for your credit. A mortgage payment is usually the biggest influence on a person’s credit so poor payment history will be on your credit for quite a while. I have seen people that had otherwise perfect credit that have used this program and ruined their chances of getting decent financing. If you are planning on getting a car loan or any other type of financing, you might consider either avoiding this altogether or waiting until you’ve got those purchases out of the way.

At the current pace, with derogatory items falling off credit after seven to ten years, you can recover from, just about any credit problem. Please use caution before you do anything that can be this devastating. If you have already done this or are in the middle of this process their is still hope. Don’t get carried away and default on other items. Being behind on your mortgage is a big deal so you will need to talk to someone with the right skills to get a loan for a car. If you are in need of a vehicle, look to a dealer who has a special finance manager. Once you are linked up with a special finance manager, let them know everything you know about the situation; be prepared with mortgage statements that go back to before you started the process, make sure these have balance, last paid, next due, and your name on them. Keep ALL of your paperwork handy just in case.

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What Kind Of Car Is The Easiest To Get Financed If I Have Bad Credit?

admin — Thu, 26 Aug 2010 04:02:30 +0000

Trying to get financed when you have bad credit can seem like a daunting task. It can be next to impossible to know what to do and you may wonder what kind of cars are the easiest to get financed if you have bad credit. I have personally heard this question many times and the answer may not be as simple as just calling out a make and model. If you are considered part of the “bad credit” group, you have something on your credit that makes it more difficult to get a car loan. The term “bad credit” could be any one of thousands of different scenarios and sometimes it makes a difference just what it is that’s on your credit report. If you have “bad credit” because you were late on your car $795 a month car payment the lenders may want to see your new loan come out to be a much lower one this time. The best car to finance with bad credit depends on so many variables that it’s impossible to say this one or that one. If you have a special finance manager that is familiar with sub prime lending enough he will usually be able to identify the cars that will work best for your scenario right off the bat. The more flexibility you have the easier it will be to get your loan. If you go in thinking you’ll only take a pink 2010 Honda Pilot, you may leave disappointed. Realize that with a bad credit situation you should have an open mind and work with your finance manager to get a car. If you’ll only take a very specific car, let them know right up front, you may save both of you some time.

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How Much Can I Get For My Trade In?

admin — Mon, 23 Aug 2010 17:52:22 +0000

If you have a car that you won’t need after you get your next car you may be considering trading it in. If you are going to trade your car in you may have wondered how much can you get for your trade in. If you are going to trade your car in, please keep a few things in mind; One, if you owe more on your car than it is worth you aren’t using it as a down payment. This is called negative equity. To find out APPROXIMATELY what your car is worth go to kbb.com. This will give you some idea. Make sure you use the trade value and not Private Party value or retail. You cannot expect either of those values from the dealer. Then don’t look at excellent value, it says that LESS THAN 5% of ALL cars are in excellent condition. You can always negotiate your trade allowance with the car dealer just be realistic.

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Why Do I Need Money Down To Get An Auto Loan?

admin — Fri, 13 Aug 2010 00:35:52 +0000

If you have bad credit, you may have been told that you need some money down to get your auto loan. The need for money down may be for several reasons.

First, the lenders may approve you for less money than if you have perfect credit. If you have perfect credit and can barrow $15,000 on a $15,000 car you may only be able to barrow $14,000 on a $15,000 car. Assuming you need to add tax title and license, you may need to put down $2,000.

Second, many times, lenders will want to have you, as the buyer personally invested in your car right of the bat. They often call this participation. Even if they will barrow you most of the cost of the vehicle they may want some money down to get you personally invested so that they feel more secure in getting all of the payments. People that have put some money down are more likely to continue making payment because they have already paid some of the car off.

Don’t worry, all of the money you use as a down payment will go toward paying down your loan. Even for people with perfect credit, it is a good idea to put money down; money down will lower your monthly payment, reduce the total of your loan, and lower the total amount of interest you pay. Sometimes putting more money down will also give you better finance terms or open up a new program that you otherwise may not have qualified for.

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How Much Money Do I Have To Make To Qualify For An Car Loan?

admin — Mon, 02 Aug 2010 16:38:44 +0000

With bad credit, you may be worried if you can get a car loan. If you have a low income, it may be even more tricky to get the financing you are looking for. So how much money do you have to make to qualify for a car loan? Their isn’t a clear answer to this question since their are a million and one variables. First off, the lenders are only going to allow a monthly car payment that you can afford. A bank will usually only allow between 12 and 18% of your gross monthly income for a car payment. To calculate you income click here. Each lender has slightly different programs and each dealership may have different lenders that they work with. Some lenders will also assume minimum monthly expenses to calculate your budget. If they assume $500 a monthly for rent, $500 a month for expenses, and then add any installment payments on your credit file you may not qualify for a car loan if you have a low income. If you make less than $1,500 a month, you may have difficulty getting an auto loan because of the minimum budgeting many lenders use. If you have someone that can sign on with you they may allow both incomes to be used.

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Does It Hurt My Credit To Shop Around At Several Dealerships And Have Them Pull My Credit?

admin — Wed, 28 Jul 2010 15:59:15 +0000

If you are looking for an auto loan you may want to talk to as many dealerships as possible and see who can offer you the best interest rates. To the average customer this may seem like a logical process. I have seen many people with the same idea, give their application to one dealer, and see what they can do, then, apply at the second dealer and find out what they can do and so on. So does this hurt your credit? Is it a bad idea? First of all, if you aren’t getting the best interest rates you are going to the wrong place. There is no magic formula that will get someone with terrible credit a prime interest rate so if this is you, getting a bunch more inquiries on your credit won’t help.

Does this hurt my credit? There are three main credit bureaus, TransUnion, Equifax, and Experian. Each credit bureau has a slightly different scoring model that they use but each will reduce credit scores with new inquiries. If you want to apply for an auto loan that’s fine, if you give your info to a dealer and they send your info to a few banks at the same time it will only affect your credit like it is one inquiry. All of your inquiries within a short period of time will only affect your credit a little. So what’s the problem? If you stretch your “just looking” process out weeks instead of days your credit score will decline more than you may be able to afford. The second issue here is that if you apply at one several dealerships it looks to the banks that you are getting declined at each and are desperate to get financing. This raises a red flag most of the time and you can be declined for “excessive inquiries“. I have seen people with excellent credit get declined because they shopped around so much that they had excessive inquiries.

Is it a bad idea to try to get the best deal? Of course not, everyone wants the best deal when they go car shopping. Avoid shopping your credit around by getting teamed up with someone who can help you accomplish what you need first. In order for you to get the best rates and the best possible scenario you need to know who to turn to. New Start Auto Loans only deals with dealerships and finance managers that have special finance programs. If you complete a bad credit or no credit auto loan application with New Start we can match you with a program in your area that has programs for bad credit auto loans.

So what should I do? Only apply if you are ready to buy. It’s not fair to your credit, the banks that need to look at your application, or even the finance managers who need to make sense of your situation to bounce around and not buy. One important thing to keep in mind is that if you want to rebuild your credit with an auto loan, the sooner you start, the sooner you can have rebuilt your credit. If you shop around and decide you will wait for six months because you don’t like what you hear, you will be six months behind where you could be if you simply got serious and committed.

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Where Do I Find Info About Getting A Car Loan With Bad Credit Or No Credit?

admin — Tue, 27 Jul 2010 00:00:27 +0000

If you have bad credit or no credit you may have searched far and wide for some good info on car loans. I can tell you that I’ve seen first hand how much garbage their is out there. If I had a nickel for every time I saw something like this, “Apply For A Car Loan – Everyone Is Approved !” I would be rich. The fact is getting a car loan with bad credit or no credit can next very tough and you can’t just look anywhere and get good info.

Any site that claims that it will be as easy as falling off a log to get a car loan with bad credit is just not telling the truth. Yes, their are some reputable web sites out their and they may offer some good tips but you need to be fully armed with ALL of the info not just some of it. Each situation is just a little different from the next. Here at New Start Auto Loans we try to offer up as much information on bad credit no credit auto loans as we can. Even we may not have all of the answers to all of the questions posted in our articles. If you would like a specific question answered and don’t see an answer in our articles or blog section PLEASE ask us in the comment section and we will answer your question quickly.

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How Much Will I Need To Put Down?

admin — Mon, 12 Jul 2010 18:25:44 +0000

When you set in to the auto loan arena, you may have a zillion and one questions. One of the biggest questions for car buyers with bad credit or no credit is how much will I need to put down? Getting an auto loan as someone with less than perfect credit sometimes requires a different approach to the auto loan structure itself. Bad credit banks may want to see a certain equity position in your auto loan right from the start. If a lender tells the dealer they want to see a 90% loan to value, this means that they will finance 90% of your auto loan and you need to come up with the rest. To get this to happen the dealer will usually pick some vehicles that they’ve got a good deal on to lessen the amount that you need down. If a car is worth $15,000 and they only paid thirteen thousand for it you might have to put less down on it to get to your 90% than if they paid all $15,000.

Let’s say they did only pay 13,000 for a car that will work for you. Obviously the dealer needs to make at least a small profit to stay in business and to pay their sales guy. Don’t go into this thinking that they can make profit off the next guy. This job is how dealers support their family and it’s selfish of anyone to try to make them work for nothing. If, at the end of your work day your boss came to you and said “we are going to keep the pay for Mondays to ourselves from here on out, don’t worry though, you can work overtime the rest of the week to make that up”. You wouldn’t stand for it! They can’t do it either. Next, you have the tax, title, license, and fees. Let assume that all together this comes to $2,000. That makes 90% of $15,000, $13,500 so your difference is $1,500. You may have guessed that this is a hypothetical scenario and each situation is different.

It is adventitious to save up as much money as you can in order to have the most options and bargaining power when it comes time to go to your dealer. If you have a certain amount that you can put down let your dealer know so that they can help you find the best scenario and the best finance programs for you, right of the bat. If you have little or nothing down it may be more difficult to get the right situation so you’ll need to be more flexible with your vehicle choices. If you want to get a particular vehicle just ask your dealer, how much will I need to put down?

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What Is My Interest Rate Going To Be?

admin — Mon, 12 Jul 2010 17:31:36 +0000

If you have bad credit or no credit and you are thinking about an auto loan you have probably wondered what your interest rate is going to be. First of all, I will break down a common scenario. First, you apply for auto financing on-line. Next, you receive a call from a special finance manager verifying your info and then telling you that they want you to come in to get squared away. The problem is you’ve already been to a few dealerships and they couldn’t help you. This is probably the most common scenario.

If you have started your auto purchase quest by going to the first dealership with a pretty car you could experience a lot of issues. For one thing if you have a difficult finance situation, they may not be set up to help you. They will either go through the entire sales process then discover that your credit is less than prime and have you get a ton of documents only inform you later that they can’t help you or just blow you off right away.

The dealerships with a true special finance department are going to know what needs to be done in order to secure an auto loan for you. When they ask you to come in with your documents they have a plan from the get go. If you are wondering what your monthly payment or what your interest rate will be, you have wondered the same thing that someone with perfect credit has also wondered. Before you get to far though, please realize that they can’t quote anyone an interest rate before they have a car and a deal structure. Just because you have less than perfect credit, don’t assume that they are picking on you when they want you to come down to the dealership. A dealer needs to take things one step at a time. I know searching for a loan can be a frustrating situation but it will only be harder if you fight the process. Car dealers can’t sell you a car over the phone; even if they could how would you know if that particular car was going to work for you? Whether you have perfect credit or the worst credit in the world you owe it to yourself and to the finance manager that is working hard for you to go through the motions just like everyone else and find the right situation.

Once you have found something that will work for you, the finance manager can send over any info the lender in requesting, such as your check stubs and then find out what terms the bank needs to see to secure you’re financing. Please keep in mind that each situation could lead to different interest rates, different amounts of down payment and even different loan terms.

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Can A Bad Credit Auto Loan Help Re Establish My Credit Enough To Get A Home Loan?

admin — Thu, 08 Jul 2010 17:02:49 +0000

If you have bad credit and are hoping to rebuild your credit enough to qualify for a home loan you may have wondered if a bad credit auto loan can help re establish your credit enough to get a home loan. First of all, a home loan is one of the hardest things that an average person will finance in their lives; hence this will usually be the biggest influence on credit history. The good news is that an auto loan is usually the second biggest factor in determining credit history and since a bad credit auto loan is easier to get, you can get an bad credit auto loan and it will help re established enough to get a home loan.

The next thing is How Do I Get an Auto Loan with Bad Credit? This is a whole new subject and is covered in more detail in our other blog articles. The main thing that will help you get an auto loan with bad credit though, is finding a special finance manager that works with situations like yours. New Start Auto Loans has a network of finance specialists that can assist you in getting your auto loan approved to start re establishing your credit enough to get a home loan. Once you have made about a years worth of payments on time, assuming that everything else is current you should see a big increase in your score and overall credit picture.

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How Old Do You Have To Be To Get A Loan For A Car?

admin — Thu, 08 Jul 2010 05:51:38 +0000

If you are a teenager and have just received your driver’s license or are about to get it, you may be wondering how old do you have to be to get a loan for a car? First of all, if you’ve never had an auto loan or have limited credit, you will be classified as a first time buyer. First time buyers may have a difficult time finding financing because they don’t yet have a proven track record that the banks can go by. Sure you really want a car and promise to make your payments if they would just pony up about $15,000 for you to give the car dealership, you’d be set, right?

If you are under eighteen though, you have a slightly larger problem than a potential zero credit score or first time buyer branding, contracts written with a minor are not valid. This means that you will have a pretty hard time convincing the bank to even consider giving you a car loan. Your best bet in this case is to ask someone who is over eighteen, like mom or dad to sign on the loan as well, if they have good credit, the bank will consider the loan much more seriously. This much more qualified applicant is called a co-signer. If you still live at home with your parents, this may be the best approach anyway. The bank may consider your parents as their ally when it comes time to get their money every month.

If you have never had an auto loan before, please don’t go crazy on your car expectations. When banks are considering your payment ability they will usually take 10% to 18% of your gross month income as a maximum monthly car payment; this means that if you make a thousand dollars a month you can’t afford a five hundred dollar car payment. Think about insurance, gas, maintenance, and repairs. These things add up.

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Bad Credit Auto Loan, Can I Get One?

admin — Tue, 06 Jul 2010 03:44:06 +0000

In my time of assisting our lending partners I have seen a lot of different scenarios and a lot of different outcomes. Recently, I talked with a finance manager that had two customers. The first clearly had a better credit score, more stable income, and less bad credit history than the second. In the end, the second drove off with a car and are well on their way to re-establishing positive credit. The first is still without a car and at this point may be on their way to not being able to buy one at all.

What happened? Well, first off, this plays out over and over without, it seems, a way to prevent it. Both customers were contacted. The second customer was patient and diligent in providing all of the documents and information the finance manager requested. When it came to being a little flexible on things, they realized that they needed to get re-established before they could ask for the world. They were happy to do what it would take to make it work. “when I first got the application I knew this would be a rough one but the customer was open and patient with the process and eventually we were able to figure out a way to get them a car that they are very happy with.” – Finance manager. The first customer however, said they were not even willing to come down, despite being told they were approved, until the finance manager told them all of the terms of the auto loan. “Their usually isn’t a way to know exactly what the terms will be until we find out what car will work. Many times the lenders will want the whole deal structure and all of their documents faxed before they give us a structure at all. Not to mention that thanks to new privacy policies we are not allowed to discuss finance over the phone even if we knew.” So eventually the first customer sent their auto loan application all over the place. Now when you send an application in, finance managers will more than likely have to try to contact several programs to get an approval or the most competitive terms. If you send your applications to five or six finance managers and they each send your application to three or four lenders you are going to have excessive credit inquires on your credit bureau and may no longer qualify.

So, you need a bad credit auto loan, what should you do? Make sure you are dealing with a place that has a special finance department. These finance managers only deal with situations just like yours all day long. They know what they are doing and they have special programs for bad credit situations. Be patient and work with them. Understand that these are people too, just like you they have a job to do and a little bit of respect can mean a lot, especially when they get a lot of people that won’t give it. Also, you will want to gather up some important documents so that you have them ready when necessary. Proof of income, proof of address, Insurance info, some references and figure out what you have available for a down payment before you talk to them so you aren’t fumbling to figure this out over the phone.

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Is It Better To Get Dealer Financing Or Go Through My Own Bank?

admin — Mon, 05 Jul 2010 18:58:55 +0000

If you are considering a new or used car purchase, you may have wondered “is it better to get dealer financing or to go through your own bank”. In order to figure this out you will need to look at what each option entails.

If financing through your local bank, you may need to do a few extra steps. First, if financing through your own bank, it may be helpful to make sure they even have an auto finance program that will suit your needs. If you are going to look at cars that are ten years old you should make sure that your bank will even finance cars that old. Once you have talked with your banker about what programs they have and if they will suit your needs, you should go out and purchase a car. From there you can bring your purchase contract to the bank so they can process the information and approve or deny your request. Please note, your lender may not want to finance the full value of your car, in this case you will need to give the dealer the balance of the money due.

If financing through a dealer, you can skip the first portions of this process and go straight to picking out a car. Once you have found the right car, simply give the finance department your info and they can do all the finance work for you. Dealerships are happy to make this part easy since they cannot sell you a car unless you either pay cash for your purchase or you get financed. Many dealers will have access to dozens of lenders so their will likely be more finance options. The dealership may even have a relationship with your lender and be able to get your loan approved with them if you prefer. Many times, dealers will offer an incentive to use their financing. They will do this because they may get paid from their lenders to secure your finance.

Someone looking to get auto financing may only finance a car even two to ten years. Many dealers finance a hundred or more cars per month so they can get loans at a discount. If you go to Wal-Mart you can expect a low price because they have huge buying power, dealerships can offer the same benefit and maybe even get you a lower interest rate than your bank.

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What If I’ve Never Had Credit?

admin — Mon, 05 Jul 2010 03:08:49 +0000

If you’ve never had credit, you are what’s known as a “ghost” and you have a zero credit score. You may wonder, what if I’ve never had credit? This is not the worst thing in the world. First of all, yes it is very difficult for a lender to determine how you will repay them if you don’t have any credit history, but if you don’t have any credit, that means you don’t have any “bad credit” either. With no credit you have your whole life ahead of you as far as credit goes so this may be an exciting time. This is a good time for you to think about your future. How do you plan on using credit responsibly? What will you do when you have established credit? How will you make sure you keep your good credit once you have it? Maybe even more important how do you get an auto loan with no credit? There are literally thousands and thousands of lenders out there. Do they all have a first time buyer program? I’m afraid not. There are however, some that do and they each have different things that must happen to allow your auto loan. The most common way to get an auto loan with no credit is to get someone with good, established credit to sign on the auto loan with you, these people are known as co applicants or co signers. They may also want to see a good equity position in the vehicle. To get a good equity position in a vehicle you will most likely need to put some money down. Don’t plan on trying to buy an expensive car the first time out either. Most lenders are only going to want to lend on an inexpensive car to see how it goes with payments. Relax it’s not forever. One you have proven yourself, say after a year or two, you will have a lot more options.

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How To Get A First Time Buyer Auto Loan

admin — Wed, 30 Jun 2010 04:36:40 +0000

If you have never had an auto loan or have limited credit you may be considered a first time auto loan buyer. Many first time buyers, have no experience in car shopping. This can make matters difficult because most dealers cannot help a first time buyer get the car loan they are looking for. Car dealers are limited by the lender programs they have and their knowledge of them. Since most car dealers deal with prime finance they don’t know how to get a first time buyer a loan. In order to get a loan as a first time buyer, you will need to understand how an auto loan works. First off, each lender has programs that are a little different. If you have found a dealer that has a first time buyer program, you should know what lenders look for to see if they would like to approve your loan.

Lenders will look at your income to determine you maximum monthly payment. If you have perfect established credit they will usually allow around 18% of your monthly income. Usually they will calculate this by dividing your year to date income by the amount of time that has past in the year. Some lenders will allow you to use your current paycheck as an indicator for your total income. In this instance, it may be beneficial to pick up all of your hours to show your full income.
Lenders may look at job time. If you are thinking about changing jobs soon, you may consider staying until you get financed as longer job time will score better than a brand new job.
Lender will look at your total debt. If you owe money on credit cards, try to pay these down or off as a high debt ratio is almost always a red flag.
Lenders may look at time at current address. If you were thing you would like to move, hold off until you get financed.
Finally, try to save up for you down payment. If you can put a thousand or two down on your car purchase, you will be much more likely to get the loan you seek.

If you need a car and have very little credit you should find a dealer that has a first time buyer program. New Start Auto Loans has a network of dealers that have special programs for a variety of different credit situations.

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