Can you get car financing even with bad credit and low credit score? Not all bad credit car loans are “bad”. You can still get a decent interest rate and a budget-friendly monthly even with a low credit score or a “scar” on your credit file.
Here are some tips you can follow to be able to get a favorable car financing rate, this 2018, even with low credit score:
Understand your credit report
Your credit file tells a lot about your financial history. With the Comprehensive Credit Reporting on the roll, banks and lenders will not only see the black marks on your file. They will also have access to the positive side of your finances such as your timely bill payments, on-time accounts and such.
It is also important to understand how long “black marks” stay on your file. If a bankruptcy or a due account is about to be removed from your file. It would be advisable to wait until these items clear out before you apply for a loan or car financing.
Talk to a loan specialist
Prior to most beliefs, it would be advisable to seek advice from a loan specialist if you are interested in applying for a bad credit car loan. These experts can easily access your current financial situation and give you an idea if you are qualified for a loan or not. The good thing is that their initial assessment will not be reflected on your credit file. Compared to banks, an inquiry on your credit file, due to a loan application will reflect on your credit file, most especially during failed applications. You are saved from another mark on your credit report through a review from a loan specialist.
Get more options
The more options you have, the better the chances in landing on a favorable car loan interest rate for you. You do not necessarily have to ask for an assessment that may appear as an enquiry on your file. You can simply ask for free quotes or get free quotes online to gather more options.
Check for older vehicles as options
Older models are less pricey than newer ones. A more affordable tag price means a lower car financing to worry about. A lower loan amount could also give you access to instant approval or better loan terms. If you can find an older vehicle model that suits your needs, you might want to do a PROs and CONs comparison to see if an older model would be a better option than a new one.
Apply for a shorter loan repayment period
A shorter loan period is a good note for any lender. It reduces the risk of a client that may potentially default on payments. Interest rates are lower, and the total interest incurred by your loan will also be lower. You might also want to consider saving for a higher deposit to be able to achieve a lower monthly amortization.
Your bad credit history is not a hindrance to secure car financing. Proving your credit-worthiness does not end with your credit score. With better options, helpful advice from experts and access to options, you can get secure a bad credit car loan with the best possible rates and payment terms for you.