Understanding Guaranteed Auto Financing
Guaranteed auto financing is designed to enable people with a troubled credit history get approved for a loan. It’s possible to locate lenders that specialize in guaranteed car loans with bad credit. You can enter into a contract that won’t break your already tight monthly budget and buy the car you need to get to work.
Bad Credit History Is Accepted
You may have missed payments in the past, had to file for bankruptcy, or have accounts in collections, but if you have a job, a checking account, and proof of identity, there are lenders willing to give you a second chance. Start by doing research to discover the different types of loans and interest rates your local bank or credit union offers. There are also credible auto loan agencies online willing to approve your loan quickly. In some cases, you can receive your guaranteed auto financing after one working day. Online finance agencies offer many benefits as they are more accessible and because all the work is done online, the approval process is shorter. They provide a transparent application process.
Improve Your Credit Report for Faster Loan Approval
Your credit score will be the deciding factor for the interest rate you pay. There are four things you can do to improve your credit report, and you need to do them three or four months before you approach a lender so they have time to show up on your report.
1. Order a free copy of your report from both TransUnion Canada and Equifax because you don’t know which one the lender will review.
2. Go over your report to see if there are late payments or other negative things listed that are not yours. Credit card companies and banks do sometimes make mistakes, which can harm your score without you knowing it.
3. If you find any mistakes, contact the credit reporting agency. Use their forms to formally correct and update your information.
4. Pay down credit balances as much as possible. Ideally, you don’t want to use more than 30% of the credit limit on any card. Recent activity of paying bills will look good on your credit report.
Getting Approved for a Guaranteed Loan
To ensure you receive guaranteed auto financing, you can prepare documents to help make the application process smooth. You should:
• Get car insurance as you may need to prove you’re insured to drive the car you buy.
• Choose a car before you approach a lender. Look at your finances and decide how much you can spend every month and choose a car that suits your budget. The more information you have about the car you want, the quicker you can be pre-approved for your loan.
• Select a credible lender whether you’re looking online or going to a dealership. The ideal way to so this is to comparison shop and understand your options. When you approach a lender, check up on the acceptable types of collateral, lending criteria, interest rates and repayment schedule.
• Have a valid driver’s license, proof of income and proof of residency.
A credible lender will provide clear and direct answers to your questions. You should expect to be able to go over the details of the terms of the guaranteed loan. When you approach a car dealership for a loan, beware of terms such as “conditionally financed” as this could indicate a scam. Never agree to changing interest rates or payment plans, and don’t ever drive a car home until you’re confident about the credibility of the loan you’re receiving.