Auto Loans With Bad Credit

Is it possible to get approved if I already have repossession? Yes, Although it may be difficult and take some extra work on your part it is possible to get approved after repossession. Subprime lenders are expecting to see bad credit and they realize that some people have had repossessions. There are a few things you can do to increase your chances for approval. 1) Be able to demonstrate that your financial problems are in the past: Let them know what circumstances caused you to fall behind on your payments. Was it a divorce, medical problem, layoff. Whatever the case be prepared to demonstrate what has changed. If you got divorced show them a copy of the divorce decree stating that the assets and the debt were divided in half, therefore you have less monthly bills then you did in the past. If you got laid off and are working again produce paystubs to show how much you are earning now. 2) Be able to come up with a substantial down payment: Putting money down shows the bank a commitment on your part and that you were disciplined enough to save up the money. It also helps you to fit within their loan to value guidelines.3) If possible add a cosigner to your application: Having a strong cosigner on your loan gives the bank more security. They have two people responsible for the loan payment. If the buyer starts to get behind on the loan the lender will call the cosigner to help bring the loan current.
 
Can I lease a car with bad credit? No- Typically lenders require very good credit to get approved on a lease. If you know your credit is bad do not waste your time trying to get approved this way. You will save yourself a lot of headaches. Put your energy into getting approved for a regular loan and you will have much better results.
 
What does OAC mean? Anytime you see an advertisement for a special rate or payment on a vehicle you will find the disclaimer OAC with an asterisk at the bottom of the add somewhere. It stands for “on approved credit”. Basically what it means is that they are offering a special on either an interest rate or a payment but you have to be approved by the lender to receive that rate. So if your credit does not meet certain requirements you will not be approved for that offer. They may still be able to get you approved but just not at the advertised special.
 
Is it true that it is harder to get approved on a new car than a used one? Not necessarily-When applying for auto loans with bad credit the guidelines that subprime lenders follow are basically the same. Where you run into trouble on new cars is that they are usually more expensive therefore the payments are going to be higher. Subprime lenders have very strict debt to income ratios that they must follow. The payment on a new car may not fit within those guidelines for your particular situation where as a less expensive used car might. That is why it is perceived to be more difficult to get approved on a new vehicle. If your income justifies it though, and you fit within the banks debt ratio guidelines you can get approved on a new car

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