How to Find the Best Car Loans for Bad Credit Borrowers
Here are ways to find the best car loans available if you have a low credit score.
A low credit score is something that is arguably not reflective of a person’s work ethic or character. However, the unfortunate reality is that it is a major factor that affects how a lender or bank judges a person who is applying for a car loan from them.
If you obtain a copy of your credit history and see that you currently have a low score (601 or lower), you should first verify the accuracy of the record. If it is proven that the score is correct, be consoled by the fact that it is still possible for you to make the best of this bad credit situation especially when you need a car loan.
“A low credit score is something that is arguably not reflective of a person’s work ethic or character.”
A bad credit rating may pose unwanted challenges, though there are still ways to maximize the chances of getting an approval for an attractive auto loan. Here are ways to find the best car loans available if you have a low credit score.
Set a realistic payment capacity
Ask yourself: With your current financial status, how much can you possibly set aside (on a monthly basis) for a car loan payment? It is advisable to be more realistic when assessing your personal finance and be sure you would not incur negative costs just to repay monthly auto loan dues.
“It is advisable to be absolutely realistic when assessing your personal finance.”
Intend to make a down payment
You can possibly lower the amount of car loan you are taking by deciding to provide a down payment. On the average, money down for a used or new car is around 12% of the total car purchase cost. Putting some money together beforehand for a down payment, can help you lower your monthly payment costs and total loan amount.
Shop around wisely
Logically, doing a comparison shopping for car loans would be advantageous as you could easily and accurately determine which auto loan is best for you. However, you should be extra careful because whenever you apply for a car loan, the lender checks your credit, which decreases your credit score. A good strategy is to set a time frame of 30 days to do all your comparison shopping to avoid potential damage to your credit. Websites like Carzing can also help you find the best car loans for your personal finance status without impacting your credit score.
“Doing a comparison shopping for car loans would be advantageous as you could easily and accurately determine which auto loan is best for you.”
Obtain a pre-qualification for a car loan
Finding the ideal car and arranging for the best financing option if you have a bad credit history can be a real challenge. It would be advisable to first secure a pre-qualification so you could find the best car loan without incurring any negative impact on your credit history. With our pre-qualification feature, you can check your car loan options and monthly payment rates before applying for a car loan.
By following these rules, you can make sure you get a loan that fits your finances best. If you’d like more assistance with your car purchase, contact our team at [email protected].