A rough credit history shouldn’t disqualify you from basic life necessities, like purchasing a car to commute to work or to take your kids to school. And a second-chance auto loan could be a great solution if you have a less-than-stellar credit history but want to put yourself on the path to rebuilding your credit. Life should be full of fresh starts and second chances, and that’s precisely what this financing product offers to borrowers like you!
Camino Federal Credit Union has served Montebello with financial guidance tailored to each member’s needs since 1941. We partner with each member to help them achieve financial success, whatever that looks like for you. Here is what you should know about second-chance car loans to determine if it’s the right financing option for you!
Buying a Guide with a Second Chance Auto Loan
A second chance auto loan can be a lifesaver in many situations. However, it is important to ensure that you understand what this loan is and how it works so that it is a financial boost instead of a burden. Here’s what you need to know about these loans!
What is a Second Chance Auto Loan?
A second-chance auto loan is a type of financing available for people with less-than-ideal credit and who want to buy an auto. These types of loans sometimes require a larger down payment, but they also could offer more flexibility.
These loans also often come with higher interest rates, but could be a great option for those who need to purchase an auto despite a poor credit history. Still, we’ve assembled some strategies to guide you before you even get to the negotiating table.
For a better idea of what loan terms will be available to you so you can know what to expect, we advise getting prequalified. By doing so, you will have an idea of what interest rates and monthly payments you will have to budget for.
Sometimes called subprime loans, these loans use different qualifying reasons from traditional loans. At Camino, we offer second-chance vehicle financing that could include features such as:
- Fixed, competitive loan rates
- Flexible loan terms
- Pre-approval
- Up to 115% financing (including tax and license)
- Mechanical breakdown insurance
- No prepayment penalty
- Local, East Los Angeles decision-making
If you are interested in a second chance loan, contacting a local Member Advisor could help ensure you receive the best options for your circumstances.
Who Needs a Second Chance Auto Loan?
Second-chance auto financing is geared toward people with poor credit or a generally checkered credit history.
A rocky credit history makes it difficult for borrowers to get approved for financing. Institutions often issue these loans to borrowers whose credit falls into either a subprime category (FICO scores 501 to 600) or a deep subprime category (FICO scores 300 to 500).
If you are in the market for a new vehicle and this sounds like your situation, you could be a good candidate for this type of financing.
Is a Second Chance Auto Loan Right for Me?
If you need an auto and want to put yourself back on track toward future financial security, second-chance auto financing could be a great solution. Still, there are several things you should consider before buying an auto with a second-chance auto loan.
With a credit institution that reports to credit bureaus, making timely payments can significantly improve your credit. Still, when obtaining a second chance auto loan, there are a few important considerations for borrowers to keep in mind.
Borrowers should consider getting pre-approved for an auto loan so they can review loan terms to ensure that the loan term length is, at most, how long they can reasonably expect their auto to last. For example, taking out a seven-year loan to finance a five-year-old car that typically only lasts ten years could pose future financial problems for you.
Borrowers should also be certain they can make the necessary monthly payments and confirm with their financial institution that they report to credit agencies so they can rebuild their credit, which is often the reason borrowers pursue this financing option in the first place.
It is also important to ensure you understand what’s in your contract to make the final decision on whether it’s right for you. Always read the contract carefully before you sign and ensure you understand crucial details, like the loan term, interest rate, monthly payment, and any additional fees you will be charged.
Still, understanding the benefits a second chance auto loan offers and if this option is right for you requires expert, candid advice, which we gladly provide our community at Camino.
What Are the Benefits of a Camino Second Chance Auto Loan?
Several benefits exist for Camino members who would like to use a second-chance auto loan, especially if you worry that your credit history may prevent you from securing another source of financing. Here are some benefits to consider:
- Drive in confidence with a safe and reliable auto secured through a loan, even if you’ve had credit problems. Camino can help you purchase a new auto, truck, or van.
- Approved members could have up to 72 months to repay the loan with no penalty for paying it off early.
- You can rebuild your credit. By paying your monthly loan amount on time, this could help improve your credit score.
How Does a Camino Second Chance Auto Loan Work?
By opening an Elite Checking Account with direct deposit, members are able to schedule automatic transfers of the loan payment. For Camino members who don’t have direct deposit, that’s no problem. Member Advisors are available to discuss the second chance auto financing options for those who don’t have direct deposit options. It’s time to build a credit history that reflects your good intentions with a second-chance auto loan.
On top of your second-chance auto loan product, did you know Camino offers a Car Buying Service? Camino can help you easily get behind the wheel of your new auto or truck without the hassle of directly dealing with a dealership. You can forget the insecurity when it comes to buying your next new auto. Camino is your trusted partner for your auto purchase.
Do You Need to Purchase an Auto with a Poor Credit History? Apply for a Second Chance Auto Loan to Receive Financing Today!
No matter the reason that you have less-than-ideal credit, we believe that your past mistakes should not limit your current opportunities. A second chance auto loan is an excellent financial product that could help you purchase an auto, even with a checkered credit track record. At Camino, we offer competitive, fixed rates, a variety of terms, and more.
Visit our Second Chance Auto Loan Program page to apply today.