The Car Loans Are Out There; Just Be Sure To Weigh Their Value |

Many people think that because America is in the midst of a recession, it is not a good time to purchase an automobile or other vehicle. However, despite the economic meltdown, people may have an easier time than they think to obtain financing for a vehicle. Of course, you’ll need to receive a regular paycheck in order to repay the loan and your credit score will be checked carefully. But, while it is true that lenders have been affected by the broad, sweeping credit freeze that set in after 2008, they are lending money to borrowers needing vehicles.

The question that needs to be asked is how much will it cost for your auto loan?

Now, more than in previous years, lenders are focusing on credit scores as a way of determining the rate of interest for auto loans. “…blemishes that didn’t used to be problems are problems now,” explained Mark Edelman, a partner in a Cleveland law firm which specializes in consumer finance. According to an online article appearing in an series on auto financing, Edelman clarified that: “Mortgage payment problems on a credit record, for example, set off alarms…at auto-finance companies and lenders…” So, while obtaining an auto loan is possible, a real specific question that must be asked is: how much are you willing to spend on interest payments? If your credit doesn’t help you be considered as a “near prime” borrower, you should expect to pay higher interest rates than those offered to people with good or great credit. Higher interest rates, of course, mean higher monthly loan payments, which may make it harder to repay your car loan in a timely manner. What to do?

• Use Good Judgement. Before getting into a loan that may be difficult to repay, consider what your genuine needs are vs. what you want. You may need to delay your gratification or lower your expectations if your wants can’t keep up with your capacity to handle more debt.

• Get A Copy of Your Credit Report. If you truly need to get a car and an auto loan is in your immediate future, get a current copy of your credit report to be clear about how a potential lender may see you. Go looking for a car with no illusions about your financial reality.

• Clean Up Your Act (Credit Report). If you have some spots that indicate a less than acceptable credit history, try to get any wrong information off your report. And, of course, get payments current if they are not already so.