While the subprime loan grew in Q1 and it was possible for the consumer to get bad credit auto loan easily, but with the rise of delinquencies it might propel the lender to tighten their credit standards, ultimately making the credit less accessible in the upcoming future.
Other findings of the recent reports suggests that possessions were up 36.5 percent overall in Q1 2014, increasing from 0.50 percent in Q1 2013 to 0.68 percent in Q1 2014. Well, the rise was due to the financial companies that provides majority of the online car loan to the credit stricken customers.
We have seen that in Q1 2014, repossession b y financial companies showed their rates to jump by 69.1 percent, from 1.78 percent in Q1 2013 to 3.01 percent in Q1 2014.”
Hence, we advise our customer to follow some tips before applying for a loan:
- Stay informed on the credit information and must provide suitable explanation to the negative information
- Try to know at least one of your credit score
- Choose an affordable range of cars such as a mid-size or a small car with ranks between payments range of 10% to 15% of your gross monthly income
- As the lenders have started to scrutinize your credit terms carefully, a higher down payment make your score more for a loan