According to the estimates made by a renowned financial institution, about 25 to 30% of the citizens of USA have a bad credit history. There is no denying the fact that it is very difficult to keep your cool in the face of such a crisis situation. However, it does not necessarily mean that your life has come to a standstill and you would not be able to overcome this crisis ever. As the saying goes – “nothing is impossible” and so it might take a lot of time and willpower to wipe out your bad credit history, but ultimately you will be successful.
If you are planning to get a car loan with a bad credit history, then you might have to pay some penalties for your poor records but ultimately you will get it. By following the six financing options that are stated in this post, you will easily get car loans despite having a poor past records.
Review Credit Report
Once you have decided to get an auto loan with bad credit, the first thing that you need to check is your credit report. All consumers have the option of checking their credit report online free of cost. Check the report thoroughly and in any case of errors report to the concerned authorities at the earliest. Since your credit record is already poor, you would not want any further issues because of the faults of others. Mostly problems arise when customers have a credit score below 320. So if your record says so, then it is time take some steps to accomplish your goal.
Look Out for Bad Credit Car Dealers
Though searching for a bad credit car dealer will not be an easy task, but you will certainly come across many car dealers who specialize in dealing with customers who have a bad credit history. Such dealers would try their best to not let you down. So contact them by email and ask about their percentage of down payment as well as interest charged on car finance, especially with customers having worst credit record. They will certainly revert back to you at the earliest as they want to sell you the car as eagerly as you want to buy the car.
Stay Within Budget
Even if some of the dealers will provide you with car loan with bad credit, there is no escape from the enormous amount of interest rates. Therefore, if you have just overcome a crisis situation and trying to make your life better, then it is best to opt for a humble car that will solve the purpose of buying it. Spending money on a fancy one will aggravate your monetary issues.
A Reliable Guarantor
If you can get the car loan co-signed by one of the close relatives, who has an excellent credit history, then you can rest assured that your loan will be sanctioned by the financial institution. The guarantor guarantees that if the debtor is unable to pay the loaned amount in time, the liabilities will be transferred to the guarantor. Since the bank is sure that, they will get back the loaned amount in time, they are ready to approve the loan.
Pay It Early
For people with bad credit record, it is best to pay the auto loan off in the least span of time. Though the amount of installment will be quite some, but it will help you in two ways. Firstly, it will be help you to re-establish your good credit records. Secondly, you will be saved from paying excess money on high interest rates.
Think About Refinancing
If you are not satisfied with the interest rates or the terms set by the financial institution, you can also think about refinancing after a span of time. By this time, your credit record might become a bit better and help you in getting a loan at a lower interest rate. Moreover, you can also save up some money for down payment to get your desired car.
Therefore, it might be quite challenging for a person with bad credit history to get car finance. But it is certainly workable. All you need to do is engage in a bit of extra research so that you can crack the best deal and opt for the one that is consistent with your budget.
The above article is written by AJ who specializes in writing articles related to loans and finances. She recommends to check this page logbook loan for your van for any queries related to log book loans for your van.