Lenders Set Tougher Requirements for Securing Auto Loans

January 19, 2009

There is no questioning the fact that the financial landscape of America is facing some tough times. There aren’t as many opportunities to get financing these days due to the restrictions placed on credit. Banks have tightened the standards for lending money, and this applies to all forms of credit.

It’s especially tough for the auto industry, where consumers depend heavily on vehicle financing. Towards that end, it is simply tougher to get an auto loan.

At one point it was very simple to procure an auto loan. Consumers wishing to get a vehicle didn’t need very high credit in order to comply with lender standards. In some cases, they could even get 100% financing on a vehicle or trade in a car they’re paying off for a new one. Not only has the standards been raised, these options have been eliminated by practically all dealerships and financing companies due to the challenging economic climate.

Today, in order to qualify for a decent loan, most lenders require borrowers to have credit that is at least 700. Otherwise, consumers are looking at very high interest rates. Fortunately, not all is bad news. Because car sales have plummeted, there are some extremely good deals out there for people who are interested in acquiring a new vehicle. Basically, it’s a buyer’s market. Considering how sales have fallen now is a great time to look for deals that may be able to counterbalance the costs of financing.

Don’t wait to get financing if the situation seems grim. The only want to really know whether or not you qualify for a loan is to shop around and see what’s available to you. If you do your homework and stay sharp, you may surprise yourself with the opportunities that still exist out there. Just know that while there aren’t as many options available for financing, the ones that exist are still useful for those who need a new or certified used vehicle.