It’s not a secret anymore that despite having less than stellar credit, people can still apply for loans to purchase vehicles. The problem lies in getting approved. Cars are major investments, after all, and not many lenders from prestigious banks are willing to finance a new car for someone with bad credit. There are, however, a few things that could help you get a loan for your new ride.
Get a Good Head Start
If you are intent on buying a new car, you must start preparing as early as possible. The first thing that should be on your to-do list is to build up your credit again. This means checking up on your credit, settling any debt you may have accrued, paying bills you may have missed, and maintaining an ideal credit score. During this period, it’s necessary not to make any big-ticket item purchases that could set you back.
Work with the Dealer
Banks aren’t your only choice when it comes to financing your new car. There are actually some car dealerships that specifically cater to people who are struggling with their credit. After an assessment of your finances, these dealers can offer you affordable options. To further sweeten the deal, you can bring proof that you are a good credit risk. Bring documents like your recent pay stub from your job, your paid utility bills, your driver’s license and some personal references. These will put you in a better position to negotiate.
Stick with the Budget
Your choice in cars will most definitely depend on how much you will be approved for. This might limit your options but you must stick with the budget if you want an easier time paying it off. That said, bad credit used car loans may allow you a little more flexibility when it comes to down payment and interest rates. A higher down payment is better because you get lower interest.