Here are 4 key steps to get really bad credit financing. Do not be discouraged just because you have poor credit. Bad credit can happen to the best of people. Things happen in life that can cause credit issues, such as job loss, divorce, bankruptcy, foreclosures, illness, etc. The good news is that buying a car with bad credit is not impossible. Today you have options, regardless of how your credit is terrible.
Keep in mind that your interest rate, down payment, monthly payments and the amount you can borrow will be based on how bad your credit is. You May also be limited to what, in the year, make and model car you can qualify for.
Do not let any of this discourage you. Keep in mind that this is only temporary as you rebuild your credit. This is not a permanent condition. On most loans, after payments on time for several years, you can refinance for better rates.
Just because you have bad credit does not mean that the world over. On May take some extra work on your part, but it is very possible for you to get a car loan with bad credit really.
Preparing for getting a car loan with bad credit.
1. Even though you know that your credit is bad, you want to know what your credit score is. Get a copy of your credit report so you know exactly what you are dealing with. Credit reports are easily available online from many sources. With your report you will also know if there are any items that were incorrectly reported. This will give you a chance to remove anything that should not be on your report.
Be aware of your credit score and how it is used to determine if you can get approved for a loan or not. Credit scores range 300-800, where 800 is excellent and the 300 is really bad. Any result that is below 620 is considered high risk loans, and lenders concerning the results in this category as subprime. Subprime loans always require a down payment and a much higher risk, so you'll pay a higher interest rate. With this type of loan you May need co-signer, or trade the vehicle to qualify.
2. View your financing options and research for the dealers who work with buyers who have credit problems. If credit is really bad, you May want to consider an independent retailer with a "buy here, pay here" programs. They are usually easier to work with because they do not have their traditional forms of financing terms and a guide line to follow. They carry the loans at home.
3. Take your time and evaluate your budget before you go looking at the car. Some subprime auto loans can run as high as 25 percent, depending on what state you live in. The amount of interest can have a major impact on the total price you will have to pay for the vehicle. Having a poor credit leaves you in a position with little room for negotiation on interest rates, and plans to provide a good down payment or have a trade in a vehicle to make your monthly payments within your budget.
