The issue of poor credit history has been a great challenge for almost everyone who wants to borrow money from lenders. Many of us have anticipated purchasing assets, but what we lack is the credit history to help us get over the line. So, getting back to the car – you may want to buy a car for your business or you just want a new ride to show off to your mates. Unfortunately, your bad credit has meant that you have been denied from traditional lenders.
So, is it still possible to get a car loan with bad credit?
The short answer, is yes. You can apply for a personal loan with bad credit loans, and use the funds to purchase a car. At Bad credit loans, we do just that – provide people with poor credit the opportunity to apply for credit, regardless of their somewhat sticky situation. Poor credit does not make it impossible to get a car loan. In sayiong so it is important to understand the factors that can affect your car loan application.
Here are five tips that will help you increase your chances of receiving a car loan when you have bad credit.
Get to know your credit score
Most lenders consider your credit score when determining whether they should grant you a loan or not. Checking your credit score and improving on them is a smart move before you apply for a car loan. Make sure always to check your credit reports and score because it will give you a hint of where your credit lies on the scale of excellent or poor. Knowing your credit score will provide you with confidence when you make a car loan application at Bad Credit Loans. You should always focus on avoiding the behaviors that can lead to a bad credit score.
Have Enough Savings For Upfront Payment
Think of a situation where you need $1000 to pay for school fees or a medical bill. You reach out to your friend asking for financial help. He then tells you, mate, I am willing to help you, but how much do you have so that I can know whether I have enough to help? In your pocket, you have a balance of zero. How will you feel? Awful, right. This is the same situation you will encounter when you submit your application to lenders. You must have some sort of saving, enough to increase your chance of securing that car loan.
Having enough money for the down payment will lower your monthly loan payment, get you a better interest rate, and may also shorten your loan repayment term or duration.
Research and Know What You Can Afford
For a student to pass exams, he or she needs to prepare very well for the exam. The same applies to you; it is vital that you prepare very well, so you are not trapped off guard when the time comes to discuss a deal. You should be informed about the APR – Annual Percentage Rate (the loans yearly interest rate). You should also be aware of the monthly car loan payment you can afford.
Knowing what you can afford will generally help you go for a car which is in your price range. Budgeting plays a large role in understanding how much you can afford. Check out this handy budgeting calculator to help you get started.
Consider to Bring a Co-Signer
Most people ignore the idea of going with a friend or co-signer to lend money. It is always lovely to walk with a friend you trust to the negotiating table. It will help inspire confidence to the lender. Confidence, together with know-how, can lead to more positive loan terms. Having a co-signer is an excellent negotiating tool and can bring about a low-interest rate.
What Next?
If you need financial support for your new set of wheels, you need to consider the above factors. You should never underestimate any document. Every detail is essential to help you get that car loan. Therefore, if you need the loan, embrace these tips, and surely your investment will go through.
Do not hesitate to ask your friend to be a co-signer when applying for a car loan. It might seem to be a light reason for a loan to be approved, but here is something you didn’t know: co-signers decrease much of a threat for lenders. They guarantee safety –because they will be responsible for the loan if you default on payments.
