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Household Finances

Buying a car

9 years ago

I am planning to buy a car, but my credit rating is under 600 and obviously none of the banks are willing to give me a loan. My wife contacted some mortgage lenders who are ready to give bad credit loans. I am having a meeting with one of them named, Prudent Mortgage Service next week to discuss about the rates and time limit they can offer. Before the meeting I would like to know about any experiences with mortgage lenders. Anyone who has an experience of dealing with lenders can share it here. I want to know because itÃ¯Â¿Â½s my first meeting with a private lender and I want to know what to expect.

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Comments (5)

emma
9 years ago
After my son in law filed bankruptcy he found a private car dealership that sold him a car in spite of his credit. They were very strict with the payments, something like 10 late they would take the car. I do not know about interest except I would think they would charge the highest interest rate the state would allow.
rjexit5
9 years ago
I would absolutely not tie up your home in any way for a car purchase. If the deal is too good for your situation...then it is something to probably walk away from.

Save the would-be payment for 3-4 months and then show up to purchase with that extra chunk of money, perhaps that would change the dealers mind.
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christopherh
9 years ago
First you have to find out why your number is so low. Are you always delinquent in making payments? Was there a reason for this like job loss? Are you over your head in bills? Way too many credit cards?

And now you want to put your home at risk? For a car? And I take it you're looking at a new car since you're willing to risk your home.

You can't afford it. You need transportation, not a new car. Go buy something that gets you from point A to point B and work on getting your credit repaired.
christopherh
9 years ago
As a follow up, I don't know of anyone who goes to a bank for an auto loan anymore.
So I looked into the interest rates at my local banks. One was 8.75% and the other was 9.25%. And both required a credit score of 720 or better.
My guess is that 90% of auto loans are arranged through the dealer. They work with all credit problems.
mike_kaiser_gw
9 years ago
I don't know what progress you've made towards buying a car, but almost anything is possible. The key financing with a poor credit score is very simple - having a large enough down payment. Basically the wholesale value of the car (which is going to be a lot less than the asking price) plus your down payment needs to be greater the amount you want to borrow.

Beyond that, having enough income to make the payment (and cover your living expenses) is really important. If you're taking home $1,000 per month and spending $800 between rent and other expenses you aren't going to qualify for a loan with a payment of $400 per month.

You'll probably end up with a finance company that will charge you really high interest rates. The best you can do is suck it up and make EVERY payment on time. Establishing a record of on time payments for installment loans go a long way towards improving your credit rating.

Depending on the finance company, they may want to install a GPS locator and/or engine disabler. Get behind on payments, even one day beyond what the contract specifies, and they'll repo it or shut it off until you do pay.

Another alternative is to find someone with good credit willing to co-sign.

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