Is there a connection between your credit score and your ability to get a car loan? What if you’re trying to buy a car even though your credit is less than perfect? Here’s what you need to know about credit scores and car loans.
What do I need to know about credit scores?
First, the basics about credit scores. Your credit score is a 3-digit number that will fall between 300 and 850, with 850 being a perfect score. This number is calculated based on your financial history, which is comprised of factors like your ratio of debt to available credit; the length of your managed credit history; the number of credit types you’ve managed; your recent credit inquiries; and your bill payment history. You can get your credit score for free by contacting one of the 3 major credit bureaus—Equifax, Experian, and TransUnion.
For a more detailed breakdown of credit scoring, see our articles about Understanding Credit Scoring and Tips for Improving Your Credit.
How are credit scores and car loans connected?
Your credit score helps lenders determine whether it may be a risk for them to lend to you. A higher credit score indicates better reliability, since lenders are considering your past financial activity to be indicative of your future activity. As such, a lower credit score may mean you’ll be charged a higher interest rate for your car loan (we’re talking up to 20%). Does that mean there is a minimum credit score to get a car loan? Not necessarily. It will vary from lender to lender.
Can I still get a car loan with bad credit?
It’s certainly possible to figure out how to get a car loan if you have bad credit—you just need to go about it the right way. One of the best things you can do is partner with a specialized lender that is willing to work with customers who have bad credit. To find one, start with a bad credit auto loan direct lender like myAutoloan.com. This will allow you shop around and get multiple offers to find the right lender for your situation.
Want a full breakdown? Read our 5 Steps to Find a Car Loan with Bad Credit.
Many car owners-to-be think that if you don’t already have the money for a down payment, you’re out of luck when it comes to getting an auto loan. But in many cases, that may not be true! Here’s what you need to know about getting an auto loan with a small down payment, or even no down payment at all.
What Is an Auto Loan Down Payment?
A down payment on a loan is a kind of guarantee to the lender that you will be able to follow through on your loan. Whether or not a lender requires a down payment on a loan will depend on the lender’s policies.
How Can You Get an Auto Loan without the Money for a Down Payment?
The way it works may vary from lender to lender. Some lenders offer a loan without asking for a down payment, but some lenders may require you to put down up to $1,000, or else 10% of the sales price. If you are trading in a car, another option is to use your trade-in as a down payment. In the end, you’ll need to work with your chosen lender to determine what your specific down payment requirements are going to be, but know that it is possible to get an auto loan with less-than-perfect down payment choices.
Once you find a lender that will meet your down payment needs, you’ll need to figure out what your loan amount should be. Use an auto loan calculator to figure out the amount based on your payment preferences. You can also figure out what type of interest rate to expect and what your payment amount would be, given a certain loan amount.
For help securing an auto loan, work with myAutoloan.com to find the best lending solution for your needs. You can also check out myAutoloan.com’s resources to learn about the process of the basics of auto financing.
When coming across online auto loan lending companies, you might be surprised to learn that very few are actually direct lenders. Many of these online entities are brokers or companies who sell applicant data to other brokers or direct lending companies who can issue a loan.
Here at myAutoloan.com, our stance has always been, “Why have a middleman?” We feel that direct lending gives our applicants more informed options when choosing the right loan for them. Worried about direct lending having a difficult or lengthy application? Don’t be – the direct lending application is very similar to indirect lending and takes just as much time.
How It Works
For direct lending, a loan application is completed by an applicant online. The application is then transmitted to the direct lending company’s automated application processing system. From there, a credit bureau report is accessed and a credit score is computed.
Based on this information, the direct lending company’s proprietary automated underwriting system can then approve or decline the applicant. The applicant is then notified of the direct lender’s assessment and can determine if they need to find another lender or wish to continue with the rate they’ve been offered.
All credit decisions made via the direct lending company’s automated application processing system are valid for a 45-day period. Declined applicants will receive proper notification indicating their declined application.
Want to Apply?
Get started on your new myAutoloan.com car loan today. With just a couple clicks, you can be on your way to owning the car of your dreams. Apply with our direct lending application today!
It’s always nice to be recognized. Our goal is to provide the same positive choice, all across the USA.
FOR IMMEDIATE RELEASE
myAutoloan.com Receives 2014 Best of DFW Texas Award
DFW Texas Award Program Honors the Achievement
DFW TEXAS June 5, 2014 — myAutoloan.com has been selected for the 2014 Best of Dallas-Ft. Worth Texas Award in the Automobile & Consumer Finance Companies category by the Dallas-Ft. Worth Texas Award Program.
Each year, the Dallas-Ft. Worth Texas Award Program identifies companies that we believe have achieved exceptional marketing success in their local community and business category. These are local companies that enhance the positive image of small business through service to their customers and our community. These exceptional companies help make the Dallas-Ft. Worth Texas area a great place to live, work and play.
Various sources of information were gathered and analyzed to choose the winners in each category. The 2014 Dallas-Ft. Worth Texas Award Program focuses on quality, not quantity. Winners are determined based on the information gathered both internally by the Dallas-Ft. Worth Texas Award Program and data provided by third parties.
About Dallas-Ft. Worth Texas Award Program
The Dallas-Ft. Worth Texas Award Program is an annual awards program honoring the achievements and accomplishments of local businesses throughout the Dallas-Ft. Worth Texas area. Recognition is given to those companies that have shown the ability to use their best practices and implemented programs to generate competitive advantages and long-term value.
The Dallas-Ft. Worth Texas Award Program was established to recognize the best of local businesses in our community. Our organization works exclusively with local business owners, trade groups, professional associations and other business advertising and marketing groups. Our mission is to recognize the small business community’s contributions to the U.S. economy.
SOURCE: Dallas-Ft. Worth Texas Award Program CONTACT: Dallas-Ft. Worth Texas Award Program
What Your Interest Rate?
FAQ’s on Interest Rates
The most often asked question we hear from our customers applying for an auto loan or refinance auto loan is, “If I apply what interest rate will I be approved for?” Interesting question with so many answers. First, you have to actually apply before we or any lender would really know. No reputable lender can answer that question without you actually applying and pulling your credit report and credit score.
At myAutoloan.com we’ve built a tool to help answer this question. Our Interest Rate Estimator tool calculates probable auto loan interest rate outcomes based on four quick questions. This tool returns a range of interest rates from Lowest APR to Highest APR along with the Average APR for your credit type all based on recent data. With this Interest Rate Estimator tool you will have a good understanding of where you stand with us and the many lenders represented on our marketplace lending platform. Additionally we publish our Today’s Lowest Rates chart that provides you with the lowest possible interest rates segmented by loan type and by loan term that you can obtain when applying at myAutoloan.com.
Second most often asked question is, “I know my credit score, what will my interest rate be if I apply?” Credit score also known as FICO score is not indicative or directly related an interest rate. Most lenders today utilize custom score cards, meaning they analyze your application attributes along with your credit report and historical customer behavior data to calculate their own score. This custom score is directly related to the interest rate, loan term and conditions a lender may use to decision your loan. Once again our Interest Rate Estimator takes a similar approach and provides you with a range of possible interest rate outcomes.
We hope you find this information helpful. Remember you can apply online at myAutoloan.com at any time online 24/7.