Auto Loans for Bad Credit
Having a bad credit score will only affect the way you live your life if you let it affect you. Having credit issues can help you get auto loans without needing to get a subprime loan. Those auto loans don’t have good terms and you can get the car you need; with the financing you can handle even with a bad credit score.
1. Credit Score
If you know your credit score before you even begin to shop for any cars, you will be able to address them and put yourself into a better financial position before you start. There are several websites and some banking site that can provide you with a free credit report that won’t hurt your credit score and will help you know what needs to be improved before you try to buy your new auto.
2. Know the Value of Your Car
Once you find the auto you want, research the car and know everything about its worth. This will make it easy to negotiate good terms for the auto loan you will need to start buying the car. If you know what the annual percentage rate (APR) will be you be able to show the owner or dealer for the car you know what your monthly payments will be. New cars are an investment.
3. Get Multiple Opinions
Car loans come in multiple formats and all people that want to offer you a car loan will want to get your business. Shop around to find the best deal you can. Do this quickly, because it will result in a dip in your credit because credit bureaus know you are about to take on more debt in the purchase of a new car.
4. Prequalified Loans
Having bad credit may make it difficult to be pre-qualified for a loan at your local bank or credit union. They can make it harder for you to lend to, but if you have a good relationship with your bank you may be able to get a manageable car loan. Car loans can be prequalified with a good banking relationship.
5. Final Terms
Make sure that the terms you negotiate are final and not subject to change at the whim of the dealer. There are scammers out there and they love taking advantage of people in a tough spot. They know you need the auto loans and the car. You should be the one to agree to the terms of the deal whenever you look at the cars.
6. Take a Friend
Take a friend along when you need to negotiate the loan. They will give you confidence and help you see where someone may be trying to take advantage of you. They are your financial shield and they should be someone you trust as a co-signer. Just make sure you know what sort of payments you are getting into. A co-signer will be taking on your debt if you fail to pay and that can damage your relationship permanently.