Having problems getting approved for an auto loan because of poor credit? You’ve come to the right place! We can get you approved for financing through our extensive network of Louisiana lenders and dealers.
When you apply online, we get you approved by a lender based on where you live, your income, and your credit profile. The process is quick and pain-free, and there are no obligations.
Louisiana Interest Rates for People with Poor Credit
There is no getting around the fact that lower FICO scores mean higher annual percentage rates. Individual interest rates vary widely based on a number of factors, including your loan provider, FICO score, vehicle type, repayment term, and other criteria. However, we can give you a range of rates based on our experience in the industry.
|FICO||Used Vehicle APR||New Vehicle APR|
As you can see, these rates are quite steep. Fortunately, there are a couple of things you can do to reduce the total interest paid on the loan. Firstly, avoid a lengthy financing term like 60 or 72 months. The longer it takes pay off the vehicle, the more you’ll pay in interest. Next, decrease the amount financed by offering a down payment.
If you wish to pay less in total interest, consider the following:
- Choose 3-4 year financing. The shorter the loan, the less you’ll pay in interest.
- Offer a down payment. A down payment will decrease the size of your loan, and therefore how much interest you pay on it.
- Resident of Louisiana.
- Weekly income of $375 before taxes.
- Employed for at least 12 months.
- Any bankruptcy discharged.
- No repossessions in the past 12 months.
What Kind of Vehicle Can I Purchase?
This varies from lender to lender. However, we’ve listed several of the common requirements here.
- New or used vehicles.
- Maximum of 75,000 miles on vehicle.
- Vehicle 6 years old or newer.
- Minimum loan amount of $7500.
Many finance companies also require that you purchase your vehicle from a dealership with whom they have a relationship.
Do I Need a Down Payment?
For applicants with poor credit, down payments are commonly required.
That’s because they reduce the risk to the lender, because if the vehicle has to be repossessed, they have a better chance of recovering their losses. As a buyer, you will owe less in total interest, simply because you’ll be borrowing less, and you’ll have less risk of being upside down on the vehicle as well.
Be that as it may, there are lenders who offer zero down car loans for people with below-average credit. However, you must be careful, as dealers sometimes roll the down payment into the total amount you borrow. In that way, you might not provide any money upfront, but you’ll pay for it in the end – with interest!
Credit Restoration Through Financing
Yes, an auto loan will improve your credit – provided that you keep making the payments. Lenders will begin to see you as a more creditworthy borrower, which means lower annual percentage rates and more favorable terms on future lines of credit. Of course, this goes both ways. If you miss payments or are late on them, you could easily exacerbate your already-weakened credit score.
To help keep your payments affordable, commit 10% of your income to your car payment. As an example, let’s have a look at the average numbers for Louisiana residents.
- Monthly Income: $1,988
- Total Vehicle Budget: $358
- Suggested Payment: $199
- Remaining Funds for Fuel, Maintenance, etc: $159
Of course, you need to scale this formula to your own income.
Louisiana Car Loans after Bankruptcy?
If you’ve filed a Chapter 7 or Chapter 13 bankruptcy, getting approved for financing can be a real concern. Fortunately, there are options. Chapter 7 is an easier process. No one will approve you before you’ve had your 341 meeting of creditors, but afterwards the door is open. If you filed Chapter 13, you will need your trustee to authorize you to take on a new loan. It will have to fit into your monthly budget and payment plan. Of course, the down payments and interest rates can be quite high for anyone who’s suffered through a bankruptcy, but that doesn’t mean you can’t secure the car loan you need.