While a balloon car loan can reduce the monthly payment on a vehicle, lenders that offer these loans, because of the higher risk involved, usually only approve them for their most credit-worthy borrowers.

Car buyers with problem credit that are self employed should be aware of the problems they may encounter when applying for a car loan.

The Costco GM Holiday Sales Event represents a good deal for car buyers – but, unfortunately, it leaves out those vehicles that most shoppers with poor credit can afford.

If you get turned down for credit or don’t qualify for the best interest rate offered, you’ll want to understand what those two-digit FICO reason codes stand for in the letter you receive.

Credit challenged consumers should check their sales contract carefully before signing on the dotted line especially for Conditional Sales Contracts.

Only a lender can tell you if you qualify for an auto loan. In addition, filling out an application to pre-qualify usually results in a hard inquiry.

To offset the increased risk, most subprime lenders will compensate by reducing the loan term as a vehicle's miles increase. Likewise, the loan term will also be shortened as a vehicle's age rises.

For those unfamiliar with what the phrase buy here pay here means, it refers to a car dealer where you can not only purchase a car, but a dealership where you can finance it, right there, as well. In this case financing is arranged with money that is borrowed from the dealer instead of a bank, credit union or finance company.

In most cases, consumers who have had a vehicle repossessed will need to wait at least a year until they can expect to get approved for a car loan with a subprime lender. While there are exceptions to this rule and buyers should still give it a try, the number of lenders willing to do this is so small that most borrowers should be prepared for a high interest rate and with the large down payment BHPH dealers will require, if they need a vehicle right away.

Borrowers having problems paying their car loans should call the lender and explain their situation. Not only is repossession is a black mark on their credit reports – often preventing them from getting a car loan for at least a year, it could end up costing them hundreds if not thousands of dollars in taxes owed to the government.