Banks are More Open to Auto Loans
Banks are More Open to Auto Loans
Big time lenders such as banks and big companies are still not open to loaning to just anybody. However, these institutions are very open to the car business. According to The Wall Street Journal, when it comes to auto loans, even those with low scores could easily get a loan from the bank, which could be the 5.7% increase that was recorded in the second-quarter of this year’s Experian report.
Car loans are still more expensive when you have less than perfect credit, according to Experian those with good credit usually are charged with only 3% on their interest. This year, those with FICO scores between 620 and 679 are charged 6.5% for the credit rate, those with 550 to 619 were charged 9.9% and those who have scores below 550 were given a 12.9% rate.
Subprime lending is also very high in numbers. Those who borrowed with bad credit had comprised almost one-half of the total numbers of the automobile loans. These are comprised of borrowers with FICO scores below 680.
The fact that lenders are now giving car loans to subprime borrowers is a positive sign that credit standards are starting to loosen up overall. This also shows that banks and other large lending institutions are more comfortable and trusting that people will be able to pay them their loans.
Car loans only represent a small risk to these institutions because of the small amounts that are being borrowed in a time interval shorter than that of mortgages. Also, once the borrower fails to pay or falls behind a monthly payment it is easier to repossess the car in the loan.
If you are a customer with poor credit and you want to own a car, it would be wise to shop around the internet or different companies for auto loans and a vehicle. Loans tend to have cheaper rates for those with poor credit if they come to banks or credit unions.
Related posts on loans for people with bad credit:
- Subprime Auto Lending Growing Once Again Subprime Auto Lending Growing Once Again Subprime lending is becoming popular once again, even though lenders are still staying away from subprime mortgages, which is the one of the triggers of the nation’s housing breakdown. There has been an increase in subprime credit…...
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- Chances of Getting an Auto Loan Become Higher Chances of Getting an Auto Loan Become Higher For those consumers who have poor credit and planning to get an auto loan, Experian Automotive’s report last May 29, 2012 will be good news for you. According to the report, average credit scores for…...
- Banks Give Out Loans to Borrowers with Poor Credit Again Banks Give Out Loans to Borrowers with Poor Credit Again Jessica Silver-Greenberg and Tara Siegel Bernard, both from The New York Times, said that banks are beginning to improve again. As a result, lenders such as Capital One and GM Financial…...
- Financial Institutions Open Their Doors to Subprime Lending Again Financial Institutions Open Their Doors to Subprime Lending Again Banks are starting to open up to subprime lending once again. Equifax spokesperson, Daryl Toor confirmed that in a statement, he further explained that it will not be easy to get a loan…...
Filed under: auto loans
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