Finding used car loans can be different than obtaining loans for new cars. Apart from credit, factors include the age of the car and its current market value. A number of large banks will not provide a used auto loan for cars that are over five years. They will, however, sometimes hand out loans that will cover the cost of inexpensive older models. Loans of this nature may not be secured and can carry a higher interest rate.
There are companies out there selling second hand cars which are under contract with few lenders that regularly provide used car loans. Interest rates here may not often be the best. It is recommended that you apply for an online used auto loan to find the best rate. Always approach this with caution and check on the status of the lender prior to applying. If you belong to a credit union, you may find better than average rates for a used auto loan, and this may be a path worth pursuing.
If you are lucky enough, it is possible to get a used auto loan for a prime interest rate, especially online and if your credit score is excellent. An excellent credit score can be quantified as 680 to 700 or higher and have established a way of paying back loans. Those with credit problems can still get used car loans but will have to do a little more searching to find one. There are some companies that will only work with people with good to excellent credit scores. If your credit is not good and you need to get a car, look for a bad credit used auto loan. You may have to pay a much higher interest rate though, regardless of whether the car is used or brand new.
Pay close attention to how lenders look at the price of the car you are thinking of. A car has to be reasonably priced and fall into the Kelley Blue Book range for age, mileage, and condition. Loans may not be granted if the car you choose exceeds this range. There are some exceptions to this as some lenders will lend out extra money to pay for service contracts or extended warranties.
When shopping around for a second hand automobile, you really should take time comparing the available online rates before agreeing to a used car loan with car dealers that specialize in handing bad credit loans. There are times when the interest rates they offer can be extremely high and not as competitive as what else is out there. Shopping for a deal that makes sense is the smart thing to do, even with a poor credit score.
To avoid a negative credit score, shop actively without applying for any loan and ask one or two lenders that have good rates and terms for used auto loan pre-approval. In a pre-approval, a lender will provide you with paperwork that will indicate how much you will be given, and the loan interest rate and terms.