Oh, no! Your car just died for its final time. What are you going to do? No one you know has the money to lend you for another vehicle, and you certainly don’t have it, either. You think about getting an auto loan, but you’ve had some financial setbacks in the last year or two, so your credit isn’t very good. You know it can be tough to get a loan even with good credit and fear that you won’t qualify for one due to your less-than-stellar credit rating. Do not despair! It is, indeed, possible to obtain an auto loan in spite of a low credit score, and the following guide is intended to show you how.
Steps to Acquiring a Bad Credit Auto Loan
Since you now know that you can get an auto loan despite your bad credit, it might be helpful to have a place to begin. Read on to discover how best to get the auto loan you need.
- Try to find a sympathetic lender – Often it comes down to the individual lender – a loan officer or other finance executive – to decide whether or not to loan you the money you need. Present your case intelligently and simply, answer any questions the representative has honestly, and you may very well get your loan approved.
- Turn on your computer – There are innumerable auto loan companies online. Get their interest rates and any special offers they’re putting out there, then take some time to decide if an online lender is right for you. There are a few things that make these lenders a good choice; they all want your business and they’ll compete for it, you can do your research from your home, and they offer good customer service after you receive your loan. They also aren’t as concerned with your credit score as traditional lenders are.
- Compare several traditional lenders – These lenders are banks and credit unions, and they may be willing to work with you regardless of your credit score if they see that you were able to maintain good credit prior to your recent difficulties. These lenders prefer a credit score of roughly 640, but don’t let that discourage you. Again, be honest with whomever talk to, and it may work in your favor.
- Go to a reputable dealer – These lenders either get the money from their own resources or from a connected financial institution like Ford or GMC. Ask around to your friends and family to get their opinions on the dealer you’re talking with. Stay away from dealers or sellers who tell you that it is mandatory to get an extended warranty, credit insurance, or that you must have the VIN etched in the windshield glass because of your bad credit. All of these statements are untrue and are used as a ploy to raise interest rates to sometimes ridiculous amounts.
You are now adequately prepared to find an auto loan even though your credit isn’t perfect. Use this guide to assist you as you begin your journey to your perfect auto loan. Good luck!