The Catch in Guaranteed Auto Loan Approval

Guaranteed auto loan approval is not new. It has been around for some time and has recently begun to gain popularity. More and more people are showing lower credit scores so banks have relaxed lending terms in order to conduct business. There really is no catch, simple requirements must be met in order for the lender to consider your application for a guaranteed auto loan approval. The following terms are pretty standard for people with less than perfect credit.

1 – Higher Interest Rates

Virtually any loan that you apply for when you have bad credit is going to carry a higher interest rate. From the lenders perspective, they stand a higher risk of the loan going into default, so in return for them extending terms to you, they have put requirements into place.

2 – Larger Down Payment

Lenders require a large downpayment because lenders believe that you will have more of a personal investment in the transaction if your money is on the line. A personal investment insures the lender that you will be more inclined to be sure that the loan does not go into default. On the other hand, the larger down payment can also result in more favorable interest rates as well.

3 – Verifiable Income

There was once a time, when you credit may have been blemished with a couple of not so good reports, you would still be able to use only your bank statements to verify your income. This is no longer the case and the banks are demanding more documentation now than they have in the past. The lender wants you to not only prove your income, but they want verification of where it comes from as well. If you are self-employed, this may come in the form of your year-end tax returns before they will even consider your guaranteed auto loan approval.

4 – Personal References

Most lenders now want personal references when it comes to guaranteed approval auto loans. These references will sometimes be verified, while other times they will simply be used as another means of contacting you should a problem arise with the loan. The general feeling among lenders is that they’ll not have to use this information, but it is certainly helpful to them should the need arise.

5 – Buy Here, Pay Here

There are many “Buy here, Pay Here” car lots throughout the United States that will approve virtually anyone. These guaranteed auto loan approval interest rates are the least favorable rates you will find. If you find yourself in a position that there is no other alternative, you’ll find that the terms are very much the same as if you were going through a standard finance company.

The primary difference between the “buy here pay here” guaranteed auto loan approval, and the deal you get from a finance company, is you choice of automobiles will be limited with the former, while the latter will permit you to buy the car from virtually any dealer around, including new cars.

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