Did you just get the news that you can only qualify for a “bad credit” auto loan and you think you are the only person in this loan category? Well, you are definitely not. Today, a lot of Americans, amounting to about 50% of the nation’s population are not listed in the prime or excellent credit categories which wins the best interest rate. This automatically means that a lot of Americans are in the bad credit category. A lot of times, when people hear the word “bad” in the description of the only auto loan that is available to them, they become worried and panic. However, there is no need for panic as bad debt simply refers to another category of regular loans that are frequently approved.
As a matter of fact, banks in the United States are now approving more bad credit auto loans than they did in years past, and as the economy keeps improving, banks are becoming more willing to accept customers with less cash at hand. Some banks even have up to 93% approval rate for bad credit auto loans.
Having dealt with the negative perspective of bad credit auto loans the next step involved in getting an attractive car for yourself on loan if you are in the bad credit category is convincing your parents or partner who might have to co-sign with you, helping out with monthly payments or down payments. In this article, we will provide you with enough points and statistics to back you up in convincing them.
Even If Bad Credit Auto Loan interest Are Higher than the Usual Credit Loan Interest, They Are Not Outrageous
Your partner or family members are exposed to a lot of information coming from financial talking heads on television, radio and many other mediums trying to sour their minds towards bad credit auto loans with claims that their interests are very outrageous but this is not true as bad credit loan interest are just about 7 to 10%. Even if this might be higher than regular loan interest rates, it can not be said to be outrageous as you can still afford attractive cars paying that rate.
More so, not too many years ago – about 50 years ago or so, even the most excellent credit pay over 10% interest and still succeeded. In fact, in the year 1981, interest rates peaked to as high as 16% and it was only recently in the year 1997 that it dropped below 10%. You can confirm this from a parent or grandparent who got auto loans at that time.
Getting A Bad Credit Loan Improves Your Chances Of Getting Better Credit.
Being faithful and prompt in your monthly payments improves your reports that go to the credits bureau and if you continue to be constant over the next months your score will begin to improve and very soon it might get to the fair or good category. Once here, you will be able to get credit at a lower rate. Plus you must have learned a lot of lessons that will prove to be quite helpful in future while you were on your way to the better loan categories.
These tips amongst many others are some of the strong points that could help you to convince your partner or anyone else to support your plan of getting a bad credit auto loan.