As many people know, doing anything in this credit-driven world gets very, very difficult if there are any major marks against you own, personal credit score. Everything from getting a Sears card to renting an apartment will somehow involve you getting a credit check, so having a low score can really impact the types of things you can do and the types of things you can afford. One of these things just happens to be pretty much the most important thing that most of us use on a day to day basis - a car.

With rising car prices it's nearly impossible to get your hands on a car without having some type of auto loan, which, of course are very common. However, if you need to get a car loan and you happen to have bad credit the effects on what types of loans you can get access to and the level of your rates are all going to be effected substantially. Overall, auto loans for bad credit aren't impossible to get, they're just a little more tricky and unfortunately aren't nearly as easy to find. This article will help you set some expectations of what the major differences and effects of having bad credit when trying to find an auto loan.

Down Payments And Interest Rates

As you've probably seen on all of the television car commercials, there have really been some amazing auto loan rates available the past couple years, with some of them even claiming that you can get into a loan with 0% interest and $0 down, which is just crazy. But, with bad credit these types of interest rate promotions aren't usually readily available as your bad credit brings about much more risk than an auto dealer would want to take on.

When looking at a bad credit auto loan you would be more likely to see interest rates somewhere between 5% to %20 or so, depending on what your state law is on interest rate ceilings. Also, you are also required to put down much more of a down payment, which are usually around 15% to 40% of the price of the car. This is quite a hike from the rates that a person with good credit deals with, but hopefully something that you can work with when looking to get a loan.

Length Of Loan (Amortization Schedule)
Another thing that's affected a lot when getting a bad credit auto loan is the length of the loan that you will be eligible for. Most regular loans offer extended payment periods that can sometime span well over 5 years, but the length for a bad credit loan is much, much shorter - more like 2-4 years max. This is because the longer you have the loan, the more spread out your payments are and the less you are paying in interest, so a shorter loan means much less liability for the company responsible for the loan.

Build That Credit Back Up!

Although getting an auto loan when you have bad credit seems like a huge hassle, it's something that's only going to get harder before it gets easier. But, the fact that you are still going to get a loan and follow by the rules (you better!) means that your credit score can only go up from here, which means that you hopefully won't have to deal with this process forever.