GMAC, the financing-arm of GM, recently announced it would be lowering the minimum credit score requirement for an auto loan to 621. The decision comes after the company was approved for a $5 billion bailout from the government. Just a few months ago, GMAC's minimum credit score was 700. A score that high made it impossible for many consumers to buy cars. Maybe banks will be next to ease lending restrictions on loans and credit cards.
Before you buy a new car, first take some time to figure out how much you can afford to pay for a new car. Aaron Gold, About.com Guide to Cars recommends figuring out what you can afford to pay on a monthly car payment then multiplying that amount by 36, 48, or 60. Add in your down payment and that's how much car you can afford.More on Car Loans:
- Before You Get a Car Loan, About Banking
- Credit Unions are Good for Car Loans, About Used Cars
- Don't Let a Car Loan Keep You From Buying a Home, About Financial Planning