Bad Credit Car Loan
What Options Do You Have?
Are you wondering if you could get a bad credit car loan for yourself? Don’t worry there are several lenders or dealers who might offer you a car dealership despite your bad credit. The following are a few options which can actually help people with a bad credit score secure a car loan.
Despite the fact that you have a bad credit history keeping your aim high is the best way to go about financing a car loan. Though a bad credit history is by no means a reflection of your usually work sense but lenders might see it otherwise.
The first and foremost thing you should try is to improve your credit score. You can do this by doing the following
- Make sure that your balance doesn’t exceed 30% to that allowed on your credit card
- Always pay off old debts. This can clearly have a great impact on your credit history
- Get your card limit increased. This would reflect well on your credit score. However this is one strategy which is only successful if you could curb your spending habits.
Bad credit car loan from a dealership
Most people are surprised to know that a car dealership would offer them a loan despite their bad credit. You can expect to secure a loan from a dealership for the following reasons
- For a lender lending a new car offers them an incentive of collecting a bigger collateral in case you fail to pay off the loan
- When buying a new car you can be assured that your money won’t be spent making repairs so you would always pay off the loan on time.
- Often the dealership is simply looking to build a relationship with a client. They would be assured that they have a client for life. That client would come to them for all future repairs. When it’s time to buy a new car they would again come to the dealership. That’s not all, they may even refer friends, family and co-workers to the same dealership. For a car dealer it’s the kind of trust which yields returns in the long term.
Getting Pre-Approved when looking for a bad credit car loan
Getting pre approved lets you chose a dealership which would offer you the lowest rate of interest. This means you have got to do your homework. Look for dealers who finance people with a bad credit. In fact you could even refer to your bank or credit union. Most people are surprised when their request for a loan is accepted by their bank. However it’s not surprising at all because you already have an account with that bank. Just keep in mind that all loan requests and enquiries shouldn’t extend the two week period. Anything more than that would show up on your credit score. Otherwise it is simply considered as one single enquiry. For a fair and reasonable application ensure you check out this site.
Bring the necessary documents
When shopping for a loan make sure all your documents are in order. This way you can show that you are low risk despite your bad credit. It’s okay to have a bad patch once or twice. However if you show that you are regularly paid, pay your utility bills on time and have a current driver license, it reflects well on your loan application.