If you wish to purchase a car however, you have poor credit, finding an affordable package may be difficult.
Many lenders charge high interest rates on auto loans for people with bad credit to make up with the risk. Therefore, buying a used car instead of a new vehicle can help you to save cash.
On this post, let’s take a look at more some tips on the best way to find a reasonable deal on bad credit car loans.
Initially, look at your latest credit file.
Order the latest copy of your report so you’ll understand specifically your status. Some car dealers may attempt to benefit from you by proclaiming that you do have a lower score so you cannot be eligible for a better deal. Bringing a duplicate of the report when visiting a dealership’s location will protect you such lies.
Second, clean up your report.
Errors or inaccurate information in your report can badly pull down your score. You can clean up these errors by sending a letter to the bureau that issued your report. It may take up to 30 days for the credit bureau’s investigation to be completed but if your dispute is found valid, the errors will be corrected and you will be sent an updated copy of your report. By doing so you can help increase your credit score. Keep in mind that raising your score by even just a few points can make a big difference in your interest rate.
Third, seek help from a car expert.
Buying a used car can enable you to save thousands of dollars but you want to make sure that you will not need to spend the same amount of money on repairs and maintenance costs. Thus, it’s a good idea to hire a professional car mechanic or someone who knows about cars to make sure that the car you purchase is still in good condition.
Fourth, be prepared for repayment.
Have you made the necessary plans to make sure that you can keep up with your monthly car loan payments? You might need to make some adjustments in your monthly budget plan to minimize your expenses. If you still have unpaid credit card balances, now is a good time for you to pay your charges in full, before acquiring a new repayment obligation.
Use your car loan to rebuild bad credit.
There are lenders who specialize in car loans for people with bad credit. These lenders are willing to extend financing even to people who have bad credit history or a poor credit score. Of course, your credit background will still be evaluated and it is recommended that you personally speak with a potential lender and explain the circumstances that lead you to bad credit. For example, if you have lost a job because your company is downsizing or if you have become ill and unable to work in the past months, a lender might be willing to give you a car loan with a lower rate despite your credit score.