If you have a poor credit rating, it’s no shame. Many people get into debt and lose control of their finances, and in these days of expensive necessities and busy working lives it’s not something that is easy to avoid. Are you looking to get an auto loan but have been refused because of poor credit?
It happens, as the lenders really need to know that they’ll get back what they lend to you. They will have the car as collateral but reclaiming if from you is the last thing they want to do. So, how can you get an auto loan with bad credit? That’s what we’re here to talk about so let’s get started!
Can I Get an Auto Loan with Bad Credit?
If you’re looking for inspiration you may want to check out Michael’s story in that video as it is a good example of how to get an auto loan with poor credit.
Our first piece of advice is that you should start to repair your credit rating. This can either be done yourself – pay all bills on time, pay of debts, make purchases on a credit card, and pay the full amount in time – or you can pay a credit repair company to help. You have nothing to lose into talking to one so it’s worth doing. But even with a poor rating a lender may still approve you if you follow some of the following tips.
- Putting down a big deposit will encourage a lender to advance you a loan as it will be smaller than usual.
- A lender may approve you at a higher interest rate than their standard deal offers, but this will mean you pay back more over a longer period.
- Taking out a loan from the dealer is often a guarantee of an auto loan if your credit is not up to scratch but will come at a higher rate.
- Get a co-signatory or guarantor perhaps a family member who agrees to underwrite the loan should you miss payments.
- Set your sights lower and buy a cheaper car than you had wished as the less money the lender is required to loan the more likely they are to approve your application.
- Check out credit unions and community banks in your area as they are their to help people with poor credit.
- Run a search for auto loans online and you will find some who work specifically with lenders for poor credit.
More than anything, however, take this opportunity to investigate where your credit lies and what the root cause behind it, and make a move towards improving your credit score as it will help you in the future.
One final point is this; if you already have a car – no matter what state of repair it may be in – the dealer may take it as part payment on a car with your auto loan, and you have nothing to lose in asking!