Finances can be a tricky a thing. Regardless of whether it be poor choices or unfortunate circumstances – or both, bad credit and debt can become a reality. Well even though bad credit might be a presence in your life – this means that you are likely to still need to move forward with obtaining new credit.
Well with bad credit, this can be more challenging – however you just might be in need of loan, for example auto financing. With a lot of debt and a poor credit situation, you will definitely want to take some additional steps to improve your chances of obtaining the car loan you require.
Here are 4 tips to securing a fast and affordable car loan now.
1. Check Your Credit Report and Take Steps to Improve your Score
Of course, this is an important step even if you aren’t looking at obtaining new credit at that point in time. However it is an even more important course of action when bad credit is an issue and you need to pursue a loan as soon as possible anyway.
Taking a look at your credit report and identifying your exact score is ideal for a variety of reasons. First it can help you detect any possible errors that might have been recorded on your report. This can happen, as mistakes can be made during the time of reporting.
In addition to these mistakes, discrepancies can also show up in your credit report, although unfortunately these can also be due to issues such as identity theft. Of course, you want to have these outliers corrected as they may be bringing down your score more than it should be.
Last but not least, you can also learn from your own credit mistakes and identify where you have done wrong in your credit actions. Then you will be able to make the appropriate steps to improve your credit. Whether this is paying off debts or at least correcting mistakes on your report – the closer you will be to securing that car loan.
2. Choose a Lender Who Specializes in Bad Credit Car Loans
If improving your credit can not be done right away and you need to obtain that affordable loan pronto, what you can also do is to look into dealing with lenders who specialize in bad credit auto loans. These companies are becoming more common, as bad credit is a reality for many individuals, yet they still need loans.
These bad credit lenders are more open to extending credit to individuals with various degrees of bad credit, and while they may still require certain pieces of information like your employment/income history – they are unlikely to turn you away because of your poor credit.
While you may have a higher interest rate, these types of companies are more likely to offer you a fast car loan you can afford. In the end, it is a good idea to go straight to the source and avoid the chain of rejection you may encounter from traditional lenders who are not likely to approve your car loan application.
3. Make a Larger Down Payment
While your car loan agreement may mean a higher interest rate, there is one way you can improve your ability to pay it down – as well as secure your loan in the first place. Starting with being able to make a larger down payment can help increase your loan success overall.
With a larger amount to money upfront, this not only reduces your overall loan size, it also can help to minimize the amount of interest you will have to pay over time on your loan. Say you are able to pay it down in 3 years versus 4 years – this can mean you are likely to have saved nearly $1000 or more in interest charges alone.
Going into a lending partnership being able to make a decent down payment can also show the lender that you are able to save money, even in light of being in a bad credit situation. Ultimately, this can improve your changes for loan approval rather significantly and is a good method of securing an affordable and fast car loan.
4. Consider Using a Co Signer
Finally, even with bad credit and even with the availability of bad credit auto sources, sometimes obtaining a car loan before you have not been able to improve your finances can be difficult. In the event, this is still a struggle – you may also want to look into have a family member or close friend act as a co-signer.
A co-signer with stronger credit can go along way to helping you obtain the financing. More specifically, your co-signer will prove to the lending party that your credit application is less risky – and you have support to help pay down the loan if necessary. When all is said and done, a co-signer can mean the difference in being able to access the loan you need – when you need it.
In the end, if you need a car loan – don’t let a bad credit situation get in your way. Of course, it is always good to take steps to improve your credit and to open yourself up to more credit opportunities by doing so.
Ultimately, however there are tips you can rely on to help make this a more successful experience. If securing a fast and affordable car loan is your goal – remember You definitely won’t be the first person to obtain a car loan with bad credit – and you won’t be the last – you have more options than you know.