The bad credit auto loan has become one of the most sought after than any other type of loan since 2008. The primary reason these loans have become so popular is the breakdown of the economy. Millions of consumers lost jobs that will never be replaced, especially in manufacturing. This left a choice of getting retrained to work in other industries or taking a job with less pay if a job could be found.
Many of these consumers who were just one pay check away from being insolvent lost homes and cars, the two largest purchases most people make in a lifetime. This dilemma left people with increasingly poor FICO scores that are so low many can’t possibly get bank or credit union financing for a car.
However, the need for transportation has not diminished. In fact, transportation has become a necessity rather than the luxury it was just a few years ago. Not having transportation is a catch-22; you need transportation to get to work and it’s almost impossible to hold a job without transportation.
The bad credit auto loan came to the rescue. These lenders give poor credit consumers a second chance at owning a car. These loans are high-risk loans for the lenders; therefore, there is one thing in particular that will be asked of you as an applicant for one of these loans that is not required if you could qualify for a regular car loan: references.
What are references? They are names, addresses and phone numbers of people who have known you for at least a year in most cases. This requirement assures potential lenders that if you skip out on the loan, they have several people to call to try to locate you. Many lenders ask for at least 4 references.
This can be a real hassle if you are not prepared. It’s best to prepare your list ahead of time in order to give accurate and complete information. Most people don’t have the ability to keep 4 addresses and phone numbers in their heads and pull them out when they need them.
Here are some tips to help you complete your list of references:
• Don’t include people living with you.
• Get permission before placing a reference on your list. Explain that you need to have 4 references to place on your car loan application. Tell them they may get a call from some lenders asking if they know you and will not call them again unless a problem occurs with contacting you.
• Only ask people who will talk favorably about you.
• Bring your prepared list with you to the dealership or lender the first time you meet them.
A complete reference list will speed up the application process by a day or two since you’ve made it easy for the lender to contact your references. They won’t need to go through long explanations of why they are calling because your supporters will be expecting their call.
This is just one of the small things you will go through to give your lender another reason to approve your bad credit auto loan. The tips you were given in this article will help speed up the process.