Auto Loans: GMAC Loosens Credit Requirements

[Apr 13, 2009.]

 

The Detroit Free Press recently reported that GMAC has agreed to relax credit standards to accept applications from GM customers with credit ratings 620 and less. This move is designed to  boost GM sales while providing a source of auto loans to those with credit problems. This can be seen as good news for the auto industry, auto lenders and consumers, as it promotes cash flow that contributes to improving overall economic conditions.  GMAC's decision should increase the base of potential qualified buyers, which now includes customers who need a bad credit auto loan to buy a car.

Bad Credit Auto Loan Opportunities Essential for Consumers

Not everyone caught up in the credit crunch has misused credit. Some folks have lost their jobs, become ill, or incurred too much debt making ends meet between jobs. Plummeting home values have snatched away access to home equity financing, and many consumers have found themselves strapped for cash with fewer credit options. GMAC's decision to provide financing for consumers facing credit challenges is a constructive step toward freeing up credit, and improving the economy.

Bad Credit: Understanding Credit Scores

Federal law permits consumers to request a free credit report from each of the three major credit bureaus each year. Although there is a fee for credit scores, reports and credit scores can be obtained at the annualcreditreport.com website. This is the official portal for ordering credit reports directly through credit bureaus; it does not require enrolling in a credit monitoring service. Determining credit scores before shopping for auto loans can help in finding the best auto loan terms available, and identifying affordable price ranges. Establishing a spending limit and maximum payment amount before shopping for a car and financing is useful for narrowing your search for a new or used car.

Auto Loan Shopping Technique: Comparing Rates and Terms

Financing companies including GMAC help dealerships increase their sales, but comparison shopping between auto dealership financing and other sources is a good idea. Credit unions  offer favorable pricing, and some banks offer better rates for multiple accounts. For instance, Establishing multiple  accounts through the same bank may lead to reduced rates for an auto loan. Comparing and printing out auto loan terms online before visiting dealerships. Negotiating for auto loan terms can help in securing an affordable auto loan that makes owning a new car accessible and enjoyable.

 

About Author:

Peter Andrew has been writing about -- and for -- business for more than two decades. For the last couple of years, he has found himself increasingly specializing in the U.S. financial sector.