Tag Archive | Credit score

Getting Auto Loans After Bankruptcy

If you have filed for bankruptcy in recent years, the most important thing for you to do is to start rebuilding your credit. Unfortunately, not many lenders will trust you after you have filed for bankruptcy. Luckily for you, in this article I am going to go through some of the things you can do to rebuild your credit. You could go in for a new credit card, you can even open up a line of credit. But, in my opinion, the best way of rebuilding credit is to go for an auto loan. Many people feel that this is easier said than done. That’s why I am going to walk you through the process of applying for auto loans after bankruptcy in San Diego.

You should know that you will even be able to find lenders that are willing to lend you money just a few days after you declared bankruptcy. It is obvious that you will be paying a very high interest rate on these loans though. If you don’t mind paying such a high rate of interest, then the only thing standing in your way is finding a lender. The internet is one of the easiest ways of doing so. Just look for bankruptcy auto loans in your area and you should get a list of countless lenders willing to loan you money. And as long as you ensure to make all your monthly payments in time, you will be able to increase your credit score as well. If you let a few months pass before applying for an auto loan, you will get a much better deal. Of course you can improve your chances of getting a loan by being in gainful employment during this time and trying to repay as much debt as you possibly can. As long as you can prove to a lender that you are trying to repay your debts to the best of your ability, they will have no qualms in lending you money. They will only lend you as much as they feel you can afford though. So don’t go off asking for auto loans to buy expensive cars just after you’ve filed for bankruptcy. These applications will most certainly get rejected. Another way you can improve your chances of getting a car loan is by getting a co-signer. And if the co-signer has a good credit score, it will be that much easier for you to get the loan. You might even get a reduced interest rate and a more flexible repayment period in such cases. This is simply because the lender is more certain of his/her loan being repaid. If you can’t repay it for any reason, they will simply approach the co-signer for the money.

Remember, your life doesn’t have to end just because you made a few wrong decisions that led to bankruptcy. If you work hard enough, you will definitely be able to bring yourself back to a respectable position in society within a few years. And there is no better way of rebuilding your credit score than by taking a loan and ensuring you repay it in time.

 

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AUTO LENDING STANDARDS PLUNGE: NEW CAR LOANS AVERAGE 110% LTV; USED CAR LOANS 133% LTV WITH 55% SUBPRIME! REPOSSESSIONS UP SHARPLY

Despite borrowing so much more, average monthly payments on new car loans rose only $6 to $458. That is because banks and finance companies were willing to lend at lower rates and grant borrowers more time to repay.

Lenders made 26.04 percent of their loans on new cars to buyers with subprime credit scores, up from 24.84 percent a year earlier, said Experian, which collects car title and financing information to compile its reports. For loans on used cars, the portion to subprime borrowers rose to 54.95 percent from 54.43 percent.

As the lenders made bigger loans, they also extended credit further beyond the value of the vehicles. The average loan-to-value on new cars rose to 110.6 percent, up by 1.17 percentage points. On used cars it rose to 133.2 percent, up by 2.18 percentage points.

Auto lenders often provide loans that exceed the value of cars they are financing because borrowers want cash to pay sales taxes and fees.

Extra-long loans are becoming more common. Some 19 percent of new car loans were made for more than six years, up from 16.4 percent a year earlier.

The percentage of loans 30-days delinquent was down in the third quarter to 2.58 percent from 2.67 percent a year earlier, Experian said.

However, the average loss on loans gone bad jumped to $7,770 in the third quarter from $7,026 a year earlier and repossessions increased sharply, particularly for subprime borrowers.

Used Car Loans 133% LTV with 55% Subprime?!

Excuse me for asking, but didn’t we try “lower-and-lower lending standards” once before? How did it work out? Can anyone tell me why it will be different this time?

Repossessions are up sharply, but who cares about that? No doubt the loans are sliced, diced, tranched, and securitized to make them appear as AAA. Pension funds are probably dumping gold to load up on them.

Auto lending, like housing in 2006, appears to be a no-lose proposition.

After all, the Fed is in complete control. Isn’t it?

Mike “Mish” Shedlock

http://globaleconomicanalysis.blogspot.com

 

Sagacious LLC

Auto Lending Standards Plunge: New Car Loans Average 110% LTV; Used Car Loans 133% LTV with 55% Subprime! Repossessions Up Sharply

U.S. car sales are up. It’s easy to explain why: car buyers borrow more as standards loosen

 The average loan on a new car climbed to $26,719 in the third quarter, up by $756 from a year earlier, and the most in at least five years, according to data collected by Experian Plc.

Despite borrowing so much more, average monthly payments on new car loans rose only $6 to $458. That is because banks and finance companies were willing to lend at lower rates and grant borrowers more time to repay.

Lenders made 26.04 percent of their loans on new cars to buyers with subprime credit scores, up from 24.84 percent a year earlier, said Experian, which collects car title and financing information to compile its reports. For loans…

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