Have you been denied by a bank or dealer for a car loan? You just need to find a subprime auto finance company. We work with a number of lenders and dealers in Milwaukee who are known for helping people with bad credit. Simply submit an application online, and our lenders and dealers compete with one another to finance your credit, which helps increase your odds of approval. For those who have low credit scores, this is a great way to get a loan.
Milwaukee Auto Loan Rates for Bad Credit
It’s a fact of life: lower credit scores mean loftier loan rates. Individual interest rates vary widely based on a multitude of factors, including your lender, credit rating, type of vehicle, loan term, and other criteria. Although your lender is the only one who can establish your interest rate, we can provide you with a range of rates based on our industry experience.
If these rates seem steep, they are indeed. Luckily, there are several things you can do to reduce the total interest you pay on the loan. Firstly, avoid an extended repayment term like 60 or 72 months. The longer it takes pay off the vehicle, the more you’ll pay in interest. Secondly, minimize the amount borrowed by offering a down payment. If you want to pay less in total interest, consider the following:
- Go with shorter-term financing. The shorter your loan, the less you’ll pay in interest.
- Put money down. A down payment will minimize how much you have to borrow, and consequently the amount of interest you pay on it.
- Valid Wisconsin drivers license.
- Weekly income of $375.
- Gainfully employed for a minimum of 1 year.
- Any bankruptcy discharged.
- No repossessions in the past year.
- Vehicles may be used or new.
- Mileage of 75,000 miles or less.
- Vehicle 6 years old or newer.
In addition, you may be required to purchase your vehicle from an approved dealership.
Down Payments: Do I Need One?
Unfortunately, down payments are often a requirement when financing a car with bad credit. They minimize the risk to the lender. If the borrower defaults, they have a better chance of recouping their losses. For you, the buyer, there are advantages as well. You will pay less in total interest, simply because the loan will be smaller, and you won’t be quite as vulnerable to negative equity, meaning you owe more on your vehicle than it’s worth. No doubt you’ve seen zero down, “sign and drive” offers advertised in Wisconsin. If your dealer or lender offers you this option, commit to driving the vehicle until you’ve paid it off, rather than trading it in early.
Will This Raise My Credit Score?
To be sure, an auto loan will restore your credit – provided that you pay it off as agreed. Your history of payments is an important component of your FICO score. When you make your payments on time month after month, this establishes your creditworthiness. For this reason, you’ll want to finance a modest, economical vehicle. Here’s a solid guideline: your monthly payment shouldn’t represent more than 10% of your monthly income. As an example, let’s consider the average numbers for Milwaukee residents.
- Monthly Income: $1,600
- Total Transportation Budget: $288
- Recommended Payment: $160
- Leftover Funds for Fuel, Maintenance, etc: $128
Of course, you must scale this formula to your own income.