A car might very well be one of the most important assets a person could own. Without access to a reliable car, something seemingly as simple as traveling to work may become impossible. Lack of a vehicle can cause a great deal of anxiety under a number of circumstances. Unfortunately, numerous consumers are not able to buy a new car because they have bad credit. Due to poor credit, they commonly end up being turned down for a car loan. Those with bad credit may soon be getting a reprieve though. Recent trends are showing bad credit car dealers are on the rise and auto dealers in general are becoming more willing to finance auto loans for troubled borrowers.
One reason for this is because the worst points of the recession are no longer affecting the market. When the economy suffered from enormous turmoil, lenders reacted by mostly approving only those with stellar credit. Those lacking a near perfect credit rating would be dismissed from consideration. Today, dealers are no longer as concerned about defaults on any financing issued. As such, those with bad credit once again are being given a fair chance at being approved for a loan. A few short years ago, the average credit score required for loan approval was 760. Today, the average has dropped to 659. However, a loan may come with stricter terms and higher interest rates. This should be expected when the borrower has a poor credit score.
Statistics also are showing that more loans are being issued. A greater amount of money is being made available to the dealers through the financial institutions they maintain partnership agreements with. The increase in loans is not just to those with stellar credit. Subprime car loans have increased quite significantly. This can prove to be good news to those who have a bad credit score who are in need of a car.
The dollar amount of the loans issued has also increased. Borrowers are not seeing lower cutoffs in the money offered in the loan. As a result, borrowers might not be locked into buying used models or models in which they really have no interest. The increase in the amount of loan funding being made available to bad credit borrowers expands their options.
Also helpful would be the lower monthly payments that lenders are offering. For those trying to get their finances in order, a lower than average, monthly payment can contribute to getting a financial situation back on track.