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Can You Obtain an Auto Loan Even with Your Bad Credit? Some people are interested to get an auto loan but have a bad credit. If you have a bad credit record, this could affect your chances in getting an auto loan. Do not be dismay because you can still get auto loans even if your credit is bad provided you meet some requirements with this regard. We will present here the definition of this type of loan and will lead you to how you can get it. Let us define first a car loan for people with bad credit standing. An auto loan for bad credit is for people who cannot secure a loan through the conventional means. The criteria for you to be able to obtain a bad credit auto loan are that you should have a low credit score, have filed bankruptcy, you have a low income level, no funds to pay down payment for a car, and had a history of a car repossession in the past.
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On the other hand, know that you cannot get a bad credit auto loan if you do not have a permanent job and just work part time, if you cannot show proof of income, and if you had a recent repossession.
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In order for you to qualify in obtaining a bad credit auto loan, the basics are that you must be at least 18 years old, you have a minimum monthly income of $1,500, you are residing in the U.S. as a citizen, and you are working full time with a guaranteed or fixed income that can cover the loan agreement. On top of these, it is helpful if you have a working phone number and proof of residency that can be shown through your credit card statement or utility bill. In a bad credit auto loan, you are usually asked to show a proof of income based on some situations. An example is showing your past tax return to validate or showing the lender of your payment stub. In a situation when you are self employed, your proof of income would come through your tax returns for at least three years, and to have this, you can hire a professional tax preparer who will make the document showing your profits. There is a cut off point with regards to the age of the car, and most dealers will not give funding for a loan if the car is beyond seven years old. Know that your bad credit auto loan will be best done through a franchised dealer since they have a good reputation of this situation. When your loan is already funded by this dealer, they would later assign your loan to a finance company. Be advised that purchasing your car from a car dealer with a buy here/pay here arrangement, the service of your loan will be through a third party payment processor.