Getting an auto loan with a bad credit history can still be tough and complex these days, but it is not impossible today. However if you have a bad credit history but feel the eager to change to a new car, then probably here are some of the key tips to consider before you decide if you ought to get yourself a bad credit car loan or otherwise. And if you do insist to go ahead to, how should it be taken care of,
a. Shop around for the best deal of bad credit auto loan that you can lay your hands on, however the chances are you will not be able to get a good low interest rate nor will you be allowed to pay a down-payment of less than 15% of the total cost of the vehicle. Try to talk with more than one bad credit car loan providers and negotiate for the best affordable rates among them.
b. Fix and amend your credit score will be a good starting place. If you own a credit score of 600 or below, then you are categorized as a bad creditor and no matter what kind of loans you are seeking for, be it a car loan, mortgage or car insurance, you are at the losing end because you are not entitled for their best interest rate nor best discounts because your weak credit standing. Therefore cleaning up your credit score with a 20% improvement will do a lot of difference for your bad credit car loan offering.
c. Don’t ever submit your loan application to more than one auto loan provider as this will reduce your credit score even worse because they will tend to check out your credit report repetitively. Instead you need to seek for an organization which specialized in finding the best bad credit auto loan for its client from multiple loan companies, but checking out your credit report for once only.
d. In order to qualify for a bad credit auto loan, you need to at least have a full time permanent job of USD1500 per month for the whole duration of the loan.
e. Not order that you will be charged on a higher interest rate for bad credit loan, in some cases, you need to convince the lender by providing some additional security such as getting your house as the loan mortgage to increase the security of your loan where your home will be the ownership of the lender if you default on your loan payment.
Is this an appropriate timing for you to get a new car considering your current bad credit score and your current vehicle which can be used still although it might be old. You can definitely put yourself in a better financial position if you can bear to wait for another 1-2 years while you fix and improve on your credit score. By then you will definitely be offered with a better rate and package considering your credit score had improved over the years.