Finding a zero down car loan in Killeen, Texas might be possible if you have excellent credit. With any credit score less than good, however, you typically can't escape the down payment requirement that special finance lenders ask for.
Why Zero Down is Hard to Find
Not all dealerships work with lenders that can offer bad credit auto financing, and finding one with these lenders that's offering a no money down program is going to be even harder to come by.
Zero down car loans in Texas are difficult to qualify for because without the stellar credit to prove you have a history of paying loans on time, a lender doesn't have much to go on. To reduce the risk of approving bad credit borrowers for a loan, they ask that you invest your own money to get the process started.
Not only does a down payment show lenders that you're serious about successfully completing a loan, it's also a good thing for you. A down payment lowers the amount you borrow, which saves you money in interest charges over the loan term.
No Money Down and Bad Credit
It's nice to think that "no money down" applies to everyone, but the truth is that not all lenders allow this, and a zero down payment offer usually ends up costing you over the term of your loan. In addition, if you have bad credit, chances are that you're going to need a subprime lender in order to get the financing you're looking for.
With subprime lenders, there are usually minimum down payments required. Though the specific amount varies by lender, most ask that you make a down payment of $1,000 or 10 percent of the vehicle's selling price, whichever is less. However, you should know that the larger the down payment you make, the more money you save.
The reason for this is loan interest. Interest is the cost of borrowing money, and the lower your credit score, the higher your interest rate is generally going to be. When you're dealing with bad credit, odds are you're looking at between an eight percent and an 19 percent interest rate on average.
With interest rates this high, making a larger down payment decreases the amount of money you have to pay interest on, resulting in substantial savings over time.
Finding the Right Dealership for You
Remember, even though getting a zero down auto loan in Killeen, TX sounds like a great deal, it isn't for everyone. In fact, if you're working through bad credit, a bigger down payment can even help tip the scales toward getting approved for the financing you need.
Though we can't guarantee you can qualify for zero down financing, we can take the hassle out of finding a car loan in Killeen and the surrounding area. Here at Drivers Lane, we specialize in connecting people to the dealers that know how to work with their credit situations.
Our network of special finance dealerships has the lenders available to help people with less than perfect credit. Simply fill out our easy, fast, and free auto loan request form and we'll get the process started for you!