How do you qualify for bad credit car loan?
Check out the following suggestions on how you can improve your chances of acquiring a car loan despite being credit challenged.
Study your situation carefully. Do you really need to buy a car at this time? Are you ready to take on a new responsibility? Will your income be enough to sustain your monthly car loan payments along with other expenses? IF you really need to purchase a car at this time, what kind of car do you plan to buy?
Since you will be acquiring a bad credit car loan, it’s best if you can keep the loan amount at a minimum level. This is not the perfect time for you to purchase the car of your dreams. If you want an expensive car, wait until your credit score has improved so you can have better loan options.
Consider car dealer financers.
You can find car dealers that extend bad credit financing at the same time. They do this in order to increase their car sales quota. While there are legitimate car dealer financers, you should watch out for scammers and predatory car dealers. If you are not aware of their tricks, you could be stuck in a bad credit car loan with excessive interest rate and fees.
Save for down payment.
It’s also a good idea to save for a down payment as many dealers require it from customers with bad credit.
Negotiate for a better deal.
Don’t think that just because you have imperfect credit, you don’t deserve a better deal or that a lender will not give you a chance to negotiate. All customers, regardless of their credit standing should be treated with respect and dignity. If you are offered a bad credit car loan, don’t grab the deal right away. Study the Terms and Conditions first and request for a lower rate. By doing so, you might be able to reduce a considerable amount from your monthly loan fees.
Prepare the paperwork.
To avoid delays with your application, find out the documents you will be required to submit so you can prepare them in advance. Most bad credit car loan lending companies will require copies of your pay slips, driver’s license, utility bills, bank statement, car insurance, personal references, and other documents that will prove your capability to handle payments.
Strengthen your eligibility.
Your credit history is just one factor that will be considered when a lender reviews your application. Other important factors are employment history and residential history. If you have just been hired for a job, you might consider waiting until you are through with probationary period or you have reached the regular employee status before applying for a car loan.
If you have just moved to a new location and have just been hired for a job, you’re most likely to be considered as a “high risk customer”. In this case, you might need to get a co-signer with good credit history to back-up your car loan application.