How to Get a Car Loan with Poor Credit

by Car Loans Bank / May 28, 2017, 7:39 pm / Published in , How-To
How to Get a Car Loan with Poor Credit

Let’s face the fact that in today’s society, a car is an absolute necessity. Oftentimes, public transportation cannot be utilized. Many professions require that an individual have a well-functioning car. It’s almost second nature to see many people driving around town in many different types of cars. As we all know, a car is also a huge financial responsibility. For some people, there is an enemy that lurks behind the scenes. Many believe this enemy can hinder the ability to obtain a car. This enemy is called bad credit. However, what everyone should know is that it’s not the end of the world if you have bad credit. Lots of people these days are able to get car loans. Having poor credit doesn’t necessarily mean that the person themselves are bad. Many companies realize this which is why bad credit car loans are available to many. 

If someone has a less than desirable credit rating, it can be very difficult to get traditional financing. But, this should not be discouraging as there are many ways for people to get car loans. It is also possible to avoid pitfalls along the way. 

What countless people don’t realize is that different financing companies have different lending criteria. This means that “Company A” may view you as a liability while “Company B” could view you as a good client. Even with bad credit, you can still obtain a car along with affordable terms that are budget friendly. 

The first thing to do before shopping for your car is to check to see if your credit is actually bad. Get a personal credit report and credit score. This can be done for free on multiple websites. It could surprise you that your credit is not as bad as you think. 

Secondly, always shop around for a good deal. Don't be afraid to ask your local bank(s) and credit union(s). Your first stop, however, should always be a bank where you already have a checking and/or savings account. Although it may not be openly publicized, even your employer may offer financing for car loans. If you can’t find help at any of these sources, then it’s time to branch out. Seek out businesses that advertise car financing. A major pitfall to avoid is going to a lender that solely advertises bad credit car loans. Businesses like these may include unnecessary amenities in their contracts that can cost you more money. These extras can include extended warranties as well as insurance. You also do not want to fall victim to another practice that some lenders have. A business that offers bad credit car loans may also offer smaller payments. On the other hand, higher interest and a longer payment term can come with such a package.

Regardless of where you venture to for car financing, one of the best things to do is have a trusted friend go with you. The impact of having a partner on your side is massive and can help things go in your favor. 

It’s a huge world out there filled with many financial decisions. However, a car loan doesn't have to be scary. Even with poor credit, if you incorporate some prudent planning and research, you can find yourself on the road in a short time.