If you need a vehicle but cannot seem to get one because of a bad credit score, you’ll be glad to hear that there are options out there designed for people like you.
Car loan for bad credit may not be available from all car dealers, but there are some who are more than willing to work with you to find a solution that ends with you driving something out of the lot.
WHERE TO GO
As far as where you should be looking to find a bad credit car loan, there are generally two types of places to look into:
Dealerships specializing in bad credit
These sorts of dealerships have been existence for a long time, but they usually have a bad reputation that they may not necessarily deserve.
Don’t judge a dealership by what you have heard about the bad credit industry in general, where scams and high interest rates abound, but have a look at specific dealerships and decide for yourself if they are trustworthy or not.
Some ways that you can get good information are by checking out what has been said about the dealership from the Better Business Bureau and online reviews. These will give you comments and complaints from people like you about the services offered by a dealership. Additionally, check to see if they offer in-house financing. Rather than relying on major banks or lenders to do the financing for them, dealerships that operate in-house have a lot more leniency to work with you and find a good compromise.
Lenders offering car loans to those with bad credit
While major banks or lenders won’t usually offer car loans to you if you have bad credit, a lot of private lenders will. Anyone who wants to avoid in-house lending or who wants a particular vehicle outside of a bad credit dealership can look for a private lender that offers bad credit car loans. Some places to look are credit unions (if you are a member of one), small lending organizations, and local car loan institutions.
Keep your wits when you’re looking for a lender, because not all of them are trustworthy. What you want is a lender who has a great reputation locally or nationally if they are a large company. You can find this out through online user reviews, word-of-mouth from friends or family members, and information from the Better Business Bureau.
TERMS OF THE CAR LOANS
Having bad credit doesn’t mean you should settle for an awful loan. Make sure you are getting something reasonable that you will be able to manage easily without ending up paying way more than you should for a vehicle. Here are some tips on what to look for:
A reasonable interest rate
Some lenders will hike up the interest rate to incredible heights when you have bad credit. You don’t have to settle for a loan such as this, because there are those other dealers that are more willing to work with you to find a solution without raising the rates up so high.
Tip: The larger your down payment is the better the terms you can expect on your loan. Additionally, if you spend a little extra time working on your credit by paying off credit bills you may also get a better loan deal.
Little or no penalty for early repayment
Getting penalized for paying off a loan too early is not something you want to lock yourself into if you can avoid it. Try to find a lender with either a very small penalty for early repayment or no penalty at all.
Bad credit shouldn’t stop you from getting what you need. You can still get a car loan for bad credit if you know where to go. Make sure to follow these tips and get the best loan you can so you don’t end up hurting your credit any more than it already is damaged!
