Trying to get a car loan with bad credit can be difficult as it might seem like you don’t have too many options. Some dealers that don’t want to take the time to find right car finance program for you will push options that are too far out of your price range and you could find that many lenders require too much time and information from you just to give you the unfortunate ‘no’ answer. Because of the internet, you now have a plethora of options without having to search to deeply, making car loans easily attainable for anyone, no matter what state their credit is in. Below are some tips to help you find your perfect lender for car financing, specifically if your credit isn’t in the best condition.
1. Shop the Different Car Loan Lenders
Shopping around for different auto finance options will help you find the best deal for your budget. Online lenders now allow people to apply for prequalification on their websites, which can give your case some weight when you finally visit a dealer.
If you want in-person help, many car dealers have relationships with various car loan companies and banks, which means they will more than likely be able to get your finance help from their network. There are also dealers that will offer you different perks such as 0% down if you can obtain a loan with them so make sure to haggle what you can because more than likely, you’ll be able to work out a deal even with bad credit.
2. Know Your Credit Score
Having an idea of where your credit score is before applying for a car loan will help you identify any inaccuracies that are preventing you from getting higher finance options. Many people won’t identify any mistakes or incorrect information beforehand and aren’t able to change it once a lender processes their application. This can cause loans to not get approved or lenders won’t give the best rates possible.
On your own, you can access your credit score through Experian, Equifax, or TransUnion. Make sure to keep the findings with you so you can compare it to what lenders and dealers find when running your personal information.
3. Pick a Car That Lenders Will Approve for Bad Credit
What many people don’t realize is that their car loan approval also depends on the vehicle they want to finance. If your credit score is bad, your lender will want you to also get something priced lower as the car will not only be more in your price range, but they will be able to work with you on getting the right down payment, monthly billing, and interest rates that work best with your budget.
For example, people that have credit scores of below 520 will have less car options unless they can afford a bigger down payment. If they are limited on what they can put forth upfront and what they can pay monthly, a finance company might want you to get an $11k or below car so you are less of a liability. This doesn’t mean your car options are completely limited as there are many great cars we can help you find at lower prices that will get you that loan so don’t be discouraged at all!
4. Make Sure to Provide All Correct Information
No matter what car loan lender you get, you will have to provide personal information such as employment verification, banking info, and even references that can make or break your loan approval. With bad credit, lenders use all of this as validity that you can afford the loan you want and that you will be responsible with the money given.
One piece of information that’s wrong, such as the amount of time you have been working at your place of employment, can cause your car loan rate to increase significantly or to be denied all together. Double check all of the information you are writing down and don’t feel bad about taking a while as the lenders and dealers only want the best deal for everyone involved!
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