Securing a loan with bad credit from a private lender is usually not any easier than a loan from the dealership. Both are equally equipped to handle customers with less than perfect credit. If your credit is less than stellar, you will be charged higher interest rates regardless of who is backing your loan. Dealing with a private lender might be easier as banks and credit unions usually have huge departments that do nothing but lend money to customers with poor credit. Shopping around is always the most important thing. Gather as many loan quotes as possible. Carefully go over the rates and the terms and then decide which one is best suited to your personal situation.
In most cases, applying for a private loan is fairly easy and affordable. You can apply online and have your preliminary loan approved within a few hours. And have final approval within a day or two.
What Are Private Party Loans?
A private party loan is a loan you arrange yourself, without the help of the dealership. You can go to your own bank or credit union or find a lender online. There are many agencies and organizations willing to give you a loan for either a new or used car. Private party loans can used to buy a car from a dealership or a private individual.
Loan Requirements
For the most part private party loans can be obtained by just about any one, even people with less than perfect credit. As a rule, lenders usually require a credit score between 620 and 700, proof of income, a permanent address and employment proof. Most lenders require an applicant with a minimum of 1 year employment with the same employer and at least six months at their current address. If an applicant does have a bankruptcy in their history, a lender will require that it be at least 2 years old and the applicant has shown good credit practices since. Lenders will most likely ask for a copy of bankruptcy discharge papers, as well.
Loan Sources
Finding private party lenders is not difficult. You can find them in brick and mortar banks and credit unions. But, with the convenience of the Internet, online loans are becoming extremely popular. Traditional lenders also provide the opportunity for borrowers to apply online through corporate websites. Applicants are eager to get results, that is another benefit to applying online as you can usually get your preliminary approval a few minutes after applying. Whether you go into a physical bank or apply online, the requirements are the same. You still need proof of income, residency and employment.
Alternately, you can enlist the help of an online car loan broker. These brokers specialize in finding private lenders. These types of websites are easily available all over the Internet. One advantage of a broker is that they collect your basic information and transmit it to several lenders. The lender then contacts you about possibly securing an auto loan. This makes comparison shopping much easier. Once submitted, offers usually arrive in your inbox within a day or two.
