In our modern society, being “without wheels” is more than just an inconvenience… it can be a major problem.
Without a car, shopping is difficult and getting to work may be impossible. That’s why “Food, Shelter, and Transportation” are often named as the three necessities of modern life.
Millions of Americans have discovered that buying a car while struggling with debt and credit issues can be a major challenge… but it’s not hopeless. There are 4 common sources for car loans if you have credit problems, but first let’s look at your situation from the lender’s perspective:
What Lenders Consider
Most lenders consider two major factors when considering a car loan:
- The “strength” of the borrower, and
- The “loan exposure”
Your strength as a borrower is determined by two things:
First, your ability to pay back a loan is critical. Simply put, the lender will determine your monthly income after taxes and withholdings. The lender will subtract all your monthly expenses. If there is enough money left over to cover a car payment, then GREAT! If not, good credit or bad, you will find it difficult to get a loan.
Second, your willingness to pay back the loan is also important. Lenders determine this by looking at your credit history and credit score. If this information shows that you have had difficulty paying others, then the lender will be more cautious about making the loan.