Yes, You Can! But Do You Want To???Jan 05 '06 Write an essay on this topic.
Popular Products in Toys
The Bottom Line There are risks/cons to every form of bad-credit financing but it can be achieved. It all depends on what you want and how sure you are about it.
Bad Credit.... So, you've recently gone through a terrible divorce leaving you with unpaid bills and a bitter ex. Maybe you or a loved one have undergone major medical issues and have bills out the yin-yang. Perhaps you were just young and stupid and thought you could have it all without making a single payment on any of it. Whatever the story, you now have bad credit! Bad credit is the black moustache on the lovely face of a model. It messes everything up and changes people's perspective of you. "Oh, John has bad credit. He must be the most irresponsible person on earth!" In reality, John may have fallen on hard times or John may have been stuck with debt run up by his ex-wife without his knowledge or consent! Case In Point Debts are thought to fall off of your credit report approximately seven years of disposition. In many cases this is true. In some cases, it isn't. What happens if you find yourself in a better position a few years post-disposition of debt. Whether you've paid it or not, those black marks will still be there in some form. You now have a good paying job, are financially stable to the best of your ability, and have become an upstanding financial citizen. Suddenly, you find yourself in need of a car! What do you do now? Reality You can get financing for a vehicle with bad credit. For many years, it was not that way. You would be turned down as soon as those nine digits of your social security number were entered into the system. You would be embarassed and leave the dealership feeling like the scum of the earth. There are a few options available to those with bad credit wishing to obtain financing for a vehicle. Which choice is right for you will take thinking and deliberation, weighing the options, and coming to a conclusion that suits your situation. Buy Here, Pay Here You have no credit and you need something NOW! You see the lovely sign or tv ads saying "No financing through the bank... buy here, pay here... everyone's approved!" What they don't tell you is that you usually have to have either 50% of the purchase price down, or it's a set monthly payment for all vehicles on the lot regardless of your downpayment. Most require full coverage insurance, which can be like a car payment in itself in many cases. My relatives recently went to a popular "no credit needed" place called JD Byrider. They were going to pay $4,000 down on a $7,000 vehicle. Even with more than 50% down, the payments were $400 monthly, just like if they had NO downpayment! Some "buy here, pay here" places are interest free. Others charge their own outrageous interest rates. This is something to be cautious about. They know you have no credit and you will pay dearly for this. It's another way of a business taking advantage of the little man. Secured Personal Loans This is another way of raising the cash for a vehicle. The bad thing is, you often must secure the loan with something near and dear to you such as your home. I would think long and hard about putting my home up on the chopping block for a vehicle. I would make sure that my job was 100% secure and I could make/meet every single payment on or before time. Putting up your home could be a costly mistake. Imagine being without a vehicle AND a home! Dealership-Bank Financing It is possible to get "bad credit" financing through the dealership. There are toll-free numbers and specific offices for the dealerships for you to call and speak with a credit specialist or credit counselor who will take down your information and get you pre-approved through a bank for a certain dollar amount. After that occurs, you simply go to the dealership, pick out the vehicle you want within those limitations, and take a walk to the office to finalize the deal. What you must realize is this.... 1) The interest rate is far higher than an average bank loan. This is the bank's reimbursement for taking a chance on a "bad seed." 2) The vehicles are usually pre-selected that you may choose from. They aren't going to let you go get a brand new 2006 or 2007 Escalade with pages of charge offs and bankruptcy. Generally these are pre-owned vehicles priced to sell at $10,000 or below. Of course, once the financing is added in, you're looking at a near $15,000 vehicle. 3) The bank is taking a chance on you. They will require references (both personal and professional) and proof of employment with a decent history. Believe me, they will contact all references and they will keep the numbers handy. 4) Most banks require you to take out loan insurance to cover the debt if you are laid-off or ill. This is not optional and it is at your expense or added into the loan cost. 5) If you miss a payment, look for your interest rate to raise in leaps and bounds. Sometimes the rate will double or even more. This is in the fine print of the contract you sign. Overall Yes, you can obtain financing with bad credit. There is much to learn and absorb and many decisions to make. You must decide which finance option is best for you and make darn sure you can handle it. Once you have bad credit, some think it can't get worse, but it truly can. You're being given one last shot at proving yourself capable of digging out of the pit of money problems and dusting yourself off. If you blow this one, there may be no more chances. Whether you choose buy here, pay here or secured loans or even high risk bank financing through the dealerships, it is still an obligation that you will pay dearly for in the long run. The question is, can you prove yourself worthy and make a new name for yourself in the big, bad world of credit scores?  |
| Read all comments (1)|Write your own comment |
|
Ads by Google
|
