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Advice on poor credit auto loan

What should I do to get the best deal I can on an auto loan?

I make $3,950 per month and have one $35.00 credit card payment. However, my credit score is 615 and I have a poor credit history. I am looking to buy a $27,000 car, which I will be putting $5,000.00 down on. What should I do to get the best deal I can on an auto loan.

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Bill's Answer
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In this article:
  • Every lender wants three qualities from a potential borrower.
  • Take your time shopping for a loan.
  • A small difference in interest can save you thousands over the loan's life.

When purchasing a new vehicle, it is important that you should shop around with several different lenders to find the best loan available. Every lender wants three qualities from a potential customer: Steady income, a relatively clean recent credit history, and a low debt-to-income ratio. If the primary borrower has these three qualities, then finding a loan is easy. If the primary borrower is lacking in any one of these three qualities, then the borrower will pay a higher interest rate or need a co-signor.

With your relatively poor credit, you can expect an interest rate between 10% and 15%, depending on the special offers and incentive programs being offered by the finance company and the manufacturer. With a large purchase, such as a new vehicle, a difference of one or two points on your interest rate can save you thousands of dollars in over the life of the loan. Take your time shopping for a loan. Coming to the table with a $5,000 down payment should give you some leverage in negotiating loan terms that fit your needs.

Again, I encourage you to shop with several different lenders to determine which finance company can offer you the best interest rate and loan terms. I invite you to visit the Auto Loan Information page to learn more about the steps involved in purchasing a vehicle. By entering your contact information into the Savings Center at the top of the page, we can make the process of shopping for a new loan easy by having several lenders contact you to discuss the best loan options available.

I wish you the best of luck in finding an auto loan that fits your needs. I hope that the information I have provided helps you Find. Learn. Save.



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