Have you been declined by a dealership in California because of subprime credit? Fear not. We feel that auto financing ought not to be so troublesome for Menlo Park residents, no matter what their credit ratings are. After you submit your application, we can set you up with a financing consultant in Menlo Park who’ll go the extra mile to get you financed.
Bad Credit Car Dealers in Menlo Park, California
You might want to stay away from buy here pay here lots, which are notorious for deceitful lending practices. There are bigger dealerships that arrange loans through banks and credit unions. When compared with a BHPH dealer, such dealers provide cheaper rates and significantly better terms. The dealer will examine your credit and income to see which models you qualify to finance. If you want to avoid missed payments or repossession, look for a reasonably priced, reliable vehicle with payments of just 10% of your income–no more. If you get paid $9,459 a month, this translates to a payment of $946.
A dedicated finance consultant can help you determine how much you’re qualified to borrow, and at what rate. In order to speak with one, be sure to submit your application.
Lowering Your Menlo Park Rates of Interest
Getting a lesser interest rate from your lender can pay off in a big way. To illustrate, a car loan of $85,131, financed at 3.50% APR for 60 months, would cost you $7,790 in interest. It would cost you $16,011 at 7.00% APR, and $25,926 at 11.00%. From 3.50% to 11.00% APR, your monthly payment would soar from $1,549 to $1,851.
Thank goodness there are steps you can take to decrease your rate of interest.
- Credit Score: Start to improve your credit score by requesting the correction of any mistakes being reported on your credit.
- Loan-to-Value Ratio: Offer a down payment of 10-20% on your purchase. This will cut down on lending risk, resulting in a lower interest rate.
- Debt to Income Ratio: Carrying less debt will often mean a lower interest rate. Pay down as much as you can.
- Loan Length: The faster you pay off your vehicle, the cheaper your rate of interest will be.
- Newer Vehicle: Lenders charge steeper rates for pre-owned cars and trucks, as they’re more susceptible to maintenance issues.
Buy Here Pay Here Car Lots in Menlo Park, California
The BHPH industry continues to grow, largely because so many people’s credit ratings were hit by the credit crunch and housing bubble. Such car lots provide funding on location, while a lot of dealerships farm this out to one of their affiliated lenders, and they typically don’t reject anyone. You will see that higher-mileage vehicles are the only models on the lot, and these are not no down payment car loans. Usually, the down payment is almost the same as what you would pay for the vehicle if you decided to buy it from a local person selling it, and interest rates of greater than 20% APR are not out of the ordinary. There’s a good reason that these car dealers have a dirty reputation. We want to connect you with a reputable dealer who can get you behind the wheel of a really good car or truck, even if your credit is terrible.
Financing Guidelines for Menlo Park Car-Shoppers
Concerning setting your monthly payment, you shouldn’t spend more than 10% of your monthly income. On top of that, plan to repay your loan in no longer than 60 months. If you adhere to these guidelines, you will find yourself buying a vehicle which costs approximately half of your yearly income. If you make $113,513 annually, the average for residents of Menlo Park, you would buy a $56,754 vehicle. Keep in mind, this is the maximum amount you should spend. Many industry experts suggest forking over even less, just 10-30% of your income for any car you buy.