Bad Credit Car Loans
It is quite common for consumers to find themselves in Financial Hardship and, at that point, it can be very hard to make payments on previous debts. If this has happened to you, not to worry, there are still plenty of options for you to get the vehicle you want & deserve – like bad credit car loans. We are here to help! There are a lot of options available to those who have had trouble in the past – whether that be bankruptcy, divorce, newcomer, or anything else! Though it is of course better to avoid problems in the first place, remember that as long as you show a good attitude and have acceptable income, there is still a good chance of an approval – at the end of the day, giving it a shot costs nothing!
What is crucial is to start rebuilding your credit. Luckily, bad credit car loans are arguably the best way to do that, since as big-ticket items that require regular payments, they show all lenders that you can be responsible, but, as a counter, it is crucial to make your payments on time, since screwing up your rebuilding credit option could be a bad look for any future financing. At the end of the day, if you need a ca & are ready for the responsibility, make sure to get a bad credit car loan from Priority Car Financing today!
All of this is not to say that messing up on a previous or current loan is without consequences. Failure to make the payment on time may force the finance company to repossess your vehicle in order to recover the money they are owed. Financing companies can use Tow Companies or Bailiffs or their own agents to repossess the car. Having the vehicle towed, however, is just the start of your financial problems. In most cases, the vehicle will be worth less than the loan balance, which means you will likely have a residual debt (called a deficiency or shortfall) after repossession. This is a very important part to understand as a consumer.
Bad Credit Car Loan vs. Bad Credit Car Lease
Please be aware that having a Car Loan or a Car Lease makes no difference in terms of repossessing the vehicle.
In the case of a leased car, the dealership or auto seller retains ownership of the vehicle. You signed a contract or lease agreement with terms allowing the lessor to seize the vehicle if you fail to keep up with your monthly lease payments. If you purchased your vehicle, you own the vehicle, but the car lender will register a lien against your car as collateral to ensure payment. If you default on your payments, they have the right to repossess the car. Keep in mind that the Lien registered in the Consumer’s name and on the vehicle gives the financing company the legal right to repossess the car.
You will receive notice that you are behind on your payments, but the lender does not have to notify you when they send someone to pick up your car. If the lender takes action, this is known as an involuntary repossession. If you know you can’t afford your vehicle any longer, you can also surrender your vehicle willingly, something known as voluntary repossession or voluntary surrender.
Misconceptions after Repossession
One of the biggest confusions for consumers is their assumption that when the car has been repossessed, then they no longer need to make payments. Unfortunately, the repossession process does not cancel your obligation to make payments under the loan or lease agreement. Once the financing company seizes the vehicle, the lender can sell it or put it up for sale at auction. The proceeds of the sale will be subtracted from any balance that you owe. Repossession costs, interest charges, and late payment fees will be added. This deficiency in realizations is now an unsecured debt which you still owe to your auto lender.
Credit & Bad Credit Car Loans
One of the big disadvantages for the consumer is the fact that the consumer’s credit will be negatively impacted. The lender will also report the late payments on your credit report, which will impact your credit score as well. This note will remain as part of your credit history for up to seven years.
While the process of Repossession is very unpleasant, we strongly recommend making payment arrangements with your lender. Any payment plan will require you to catch up on all of your payment arrears and repay any repossession fees and recovery costs they may have incurred. Arrangement with the Lender will only benefit your current situation since a settlement offer could clear up your debts.
This process & the problems that your lack of payment causes to your credit report & score is what creates the environment for a bad credit car loan. The fact that you have caused these problems, or lost money for previous companies in the past, whether through car loans or other debts (credit cards, line of credit…), means that a new lender needs more compensation for the higher risk – this is why it is a bad credit car loan!
Filing bankruptcy will not stop a repossession because your auto lender is a secured lender. Secured creditors are not prohibited by the automatic stay in bankruptcy or consumer proposal from enforcing their security rights.
If you decide to walk away from your car loan, or if your lender has already repossessed your vehicle, it is possible to file bankruptcy or a proposal to eliminate the unsecured deficiency.
Car repossession does not have to lead to continued financial hardship. While we don’t recommend people pursue the last resort of bankruptcy just to deal with a car loan deficiency, if you have other debts, filing a bankruptcy or proposal to deal with all your debt problems can make sense.
Keep in mind, this is concerning to a lender since they will assume that others have lost money with you.