Amortization Plan

As some of us have unfortunately learned the hard way, having a bad credit score can really make some things hard or nearly impossible. Some of these include getting a personal loan, securing a decent mortgage, getting approved for a cell phone plan and what I’d like to talk about in this particular article, getting a decent auto loan.

Getting an auto loan with bad credit is nothing new and is actually probably much more common than you would think (lots of Americans have bad credit problems). But, before you go try to secure one there are a few things that you should probably prepare yourself for as you begin your search.

The first thing that you should realize is that many bad credit auto loans are going to require much more of an upfront down payment than you would ever see with a normal loan. This is because the lender needs to minimize your risk as much as possible so the more that you can contribute, the better they feel about loaning you the rest of the money that you need. You should expect to have a down payment anywhere from 15% all the way up to %50 of the price of the car that you’re looking to buy. This could dramatically change what type of car you can drive off the lot with, so be sure to have it in mind as you begin shopping around.

The second thing is that your interest rate (or APR) is going to be higher than a normal loan as well. This should come as no surprise as I said; you carry much more liability to the lender than a normal person with good credit. Where you can now find a loan with 0% APR (interest rate over the length of your loan) if you have great credit, you will be more likely to see an APR more in the range of 5% to 15%.

Finally, the amortization schedule, or length of your loan, will most likely be substantially shorter now that you have bad credit, so this will also make your payments higher, too. Where a normal auto loan will give you payment options up to sometimes 5 years, you’ll rarely see a bad credit auto loan for longer than 2-4 years.

By: Ryan Hupfer

Tags: 0 Interest, Auto Loan Amortization, Auto Loan Amortization Schedule, Bad Credit Auto Loans, Credit Auto Loans, Getting A Personal Loan, Loan With Bad Credit, Upfront
Posted in Finance · December 11th, 2008 · Comments (0)

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