Car loans for low credit scores

It’s getting easier to get a car loan, which is good news all around. Car loans will help numerous who have low credit scores and no way out. A looser car credit market helps the auto industry sell more cars. Auto lenders are happy with more cars being sold. Also, more cars being sold mean a recovering economy. Article source – Car loans getting easier for individuals with low credit scores by Car Deal Expert.

Bad credit, still get car loans

Auto lenders are expanding as the car credit market shows signs of life. The Associated Press reports that car buyers with low credit scores are getting a break. Historically, the approval rate for subprime borrowers — those with scores below 620 — ran about 60 percent. The rate was down to five percent last year. It has gotten up to 9 percent though. Subprime borrowers nevertheless have to make a bigger down payment and will pay more interest, but car buyers with poor credit make up a big chunk of the market.

Interest rates for car loans falling

17 percent of auto loans with bad credit were given to those with amazing credit, as outlined by the Associated Press, in 2010’s first quarter. Rather than getting new cars with loans, 53 percent got used cars. The increase in borrowing may be helped along by falling car loan interest rates. In the last year, Bankrate.com explains, interest rates dropped from 7.2 percent to 6.3 percent on 4 year auto loans.

Auto makers need buyers with low credit scores

Credit scores are falling to new lows for millions of Americans. Below 599 in credit is now, according to FICO Inc., 25.5 percent, 43 million of people. Subprime lending comes with higher default rates, which hurt the auto lending industry during the economic meltdown. Buyers that are risky are wanted by GM now the But the Wall Street Journal reports. Those with poor credit have to purchase cars since they, historically, have made up most of the cars being bought from GM.

Great auto lending

To be able to get these loans to buy cars with low credit, GM had to make a special deal with AmeriCredit Corp. GM gives more competitive rates because they’re reducing the cost of borrowing to encourage people to buy from them. Americredit Corp. is a huge subprime auto lender. A year ago, the business worked with 4,500 dealers when now it has increased so it can start working with 8,000 dealers.

Associated Press
google.com/hostednews/ap/article/ALeqM5gCH7uRdNTEXaUCoNUPeukZZi3qDwD9H22DQ00
Bankrate.com
bankrate.com/
Wall Street Journal