Vehicle Loans - Auto Loans

Auto Loan Online
Auto Loan Payment
Auto Loan Refinance
Auto Loans
Bad Credit
Get an Auto Loan
Others
Guaranteed Bad Credit Auto Loan

The phrase “guaranteed bad credit auto loan” on a sign does not mean that a dealer will give an auto loan to anybody with bad credit. Instead it means that the dealer will make loans to people with bad credit who have the money to pay off the loan.

Car dealers advertise guaranteed bad credit auto loans because they know that there are many people with bad credit who have the money to make car payments. Having “bad credit” means that a person has a record of not paying off debts or defaulting on loans in the past, it doesn’t mean that the person is poor.

Instead advertising guaranteed bad credit auto loans usually means that the dealer will issue an auto loan to any person who can prove that they have the income to pay off the loan. This usually means that the dealer will make an auto loan to anybody who can prove that they have a good job. It also means that the dealer will make auto loans to people with other sources of steady income such as pensions or Social Security benefits. 

Drawbacks to a Guaranteed Bad Credit Auto Loan

Car dealers like to make guaranteed bad credit auto loans because they can make a lot of money off of them. The dealer or lender can charge a much higher interest rate to people with bad credit and make more money off of loans to such a person.

Buyers will usually pay more for a guaranteed bad credit auto loan. Such loans often come with an interest rate of 15% or higher.

A buyer may also be required to put up a vehicle for trade in or make a large down payment to get guaranteed bad credit auto loan. Those who can’t bring in a down payment or trade may have a harder time getting such a loan.

Dealers often only make guaranteed l auto loans on cars they can’t sell through other means. This means that buyers seeking guaranteed approval auto loans will have a smaller selection of cars to choose from.

How a Guaranteed Bad Credit Auto Loan Works

Lenders are able to make guaranteed bad credit auto loans available because they are secured loans. Since the lender has the right to repossess the car in such a loan they can recover some of their risks if the borrower doesn’t pay.

A guaranteed bad credit auto loan is an income loan this means that the amount of the auto loan will be limited by the amount of income the buyer has available. Many people will only be able to buy used cars or less popular newer models because of the income limits.  The amount of the loan will be based on the borrower’s income.

This also means that a buyer will have to submit to income verification to get such a loan. They will have to present proof of income usually in the form of banking records. If a person can’t prove they have a good source of income such as a job, a pension or a government benefit payment they won’t be able to get a guaranteed bad credit auto loan.

One big advantage to guaranteed bad credit auto loans is that a buyer won’t have to submit to a credit check to get one.