Finding a Match Between 100% Auto Financing and Bad Credit

Though it may be time consuming, car shopping is an exciting time for most folks. Family and friends brain-storm with the buyer as to what kind of vehicle would best suit the lifestyle. Online research about options, reliability, and maintenance is interesting. Going for test drives is just plain fun. Of course, the less pleasurable requirements seem a small price to pay for owning a new car – price haggling, filling out the loan application, and other routine paperwork.Do Not Let It Be A ChoreThings go smoothly if you have stellar credit. If not, car shopping may turn into a big uncomfortable disappointment. Folks with poor credit usually consider car shopping an unpleasant undertaking. Loan rejection, sky-rocket interest rates, budget-leaching monthly payments, and huge down payment amounts all contribute to the unpleasantness. All this hassle can evaporate by having all financing arranged before even stepping onto a lot. 100% financing is even better. And folks with poor credit can land this type of loan.100% Financing BasicsZero down financing is another name for 100% auto financing. No out of pocket cash is required. Basically, once approved, you only have to sign the paperwork and take delivery of your automobile. 100% financing can cover state sales tax and licensing fees, optional features, aftermarket options, extended warranties, and the like. Talk about convenience!Zero Down with Bad CreditIn a lot of cases, bad credit and zero down financing do not mix. Lenders who finance auto loans for people with bad credit do not want to put themselves at too much risk. Many lenders see a hefty down payment as an indication that the poor risk borrower is less likely to default on the loan and more willing to keep payments up to date. The high down payment also puts more equity into the car should the lender be forced to repossess. The logic is clear, but that does not make it any easier for a consumer with low credit scores who is in need of wheels and cannot afford a significant down payment. While they are few, there are lenders willing to make such a loan to a poor credit risk consumer.Expect Some TediumThough these lenders do exist, there are certain requirements that poor credit borrowers have to meet. One, lenders, who offer zero-down financing to credit-risky customers, typically issue loans only for specific new cars or only for slightly-used cars. Two, such loans usually have higher interest rates to lessen the burden of default for the lender. Three, loans tendered with no down payment require longer processing times. Lenders scrutinize the financial life of the borrower a lot more closely than for good credit risks. Your employment, your income, your residency, the nature of your credit blemishes, and more are all examined before the loan is approved, and this takes time.Final Word on 100% Auto Financing for People with Bad CreditOnce you find a lender who is willing to finance people with bad credit, do not expect instant approvals. Be prepared to collect and submit detailed documentation regarding all aspects of your financial life. But, once you have everything settled, you can step fearlessly onto a dealer lot and test drive until your heart is content.