Put simply, poor credit can get in the way. In years past, it has very much hindered the auto loan process, completely terminating the odds of many people purchasing a car. However, thanks to recent advances in automotive financing, that is hardly the case anymore. In fact, more and more consumers struggling with poor credit are finding it easier to procure Bad Credit Auto Loans.
How is this possible? Well, recent consumers have been increasingly reliable, literally paying back their loans. Lenders have become kinder in light of this, allowing for more loans and better rates. In addition, there are several ways you can increase the likelihood of getting bad credit auto loans.
- Investigate Dependable Used Cars: Saving money is in the forefront of everyone’s mind, especially if you have poor credit. Not only would a used car be significantly more affordable in general, but if the vehicle has been inspected and confirmed reliable, a decent interest rate can still be found. Used cars can be found through auctions, used car lots, or even independent sellers such as those on Craigslist. The Internet can also be of great value here, adding ease, comfort, and the ability to comparison shop from the comfort of your living room.
- Get to Know Your Credit Score: It is a wise idea to visit one of the three credit bureaus and take a look for yourself. Information is key in this entire process. The more you know the more authority you have to make an educated decision. In all honesty, entering the auto loan industry with limited knowledge of your own credit score is a bad idea.
- Get the Loan before Visiting the Dealer: By getting loan through the car dealership, you risk higher interest rates and middle man fees. However, if you procure the loan before going to the dealer, you have more bargaining power. Furthermore, you have concrete knowledge of your budget and what can be afforded.
In addition to these three steps, you might want to consider a down payment of at least 10%. This will ease lenders into a peace of mind that you will, in fact, pay off the loan. Truth is, the larger the down payment, the less of a risk you are to the lender. So take some time to save up a little. You will benefit from it in the long run.