It is really tough to take a car loan if you have a bad credit and that too on good terms. You might get subprime loans from a few lenders, but the terms are not at all favorable and the monthly installments are quite high. So what to do? Well, there are ways of getting a loan for your car inspite of having a bad credit. And if you pay your monthly installments properly, your credit score will be better with time.
Understanding the credit score – Before buying the car, it is imperative to understand your credit score. You can repair many issues like felonious payments. If you start to fix your score prior to purchasing the vehicle, it will be easier for you to get loans from the lenders.
A thorough research is the key – There is no alternative to a detailed research when it comes to find a money lender and taking loan with an awful credit. It will make you totally aware of the processes to make you ready for the deal. You must know about the APR or Annual Percentage Rate, Kelley Blue Book value of the car in case you are buying a used car.
Make the terms final before buying – In many cases, it is seen that the buyer hasn’t completed their deal before buying the vehicle. In such cases, you might have to pay a higher monthly installment or higher down payment. So, make sure to close deal properly before the purchase so that your dealer cannot do any type of scam with you.
Talk to a few dealers before finalizing one – You will find a number of money lenders that will provide you with car loans with bad credit. So, it is really wise to talk to a few of them before selecting one. You will be surprised to know that even if 2 people have same credit score, the lenders might not treat them equally. Even though your credit score is awful, you can get the loan on your preferred terms in comparison to the other who has similar score and no record of bad credit.
Stay away from the subprime lenders – These types of lenders provide the people with car loans who have a history of bad credit. They make the entire process so smooth and stress free that you will feel totally relieved. But later, you will see that the rate of interest is extremely high and it doesn’t have anything to fix your credit score. They use your vehicle as collateral. In case, you can’t pay the installments, your vehicle will be gone.
Be careful about scams and add-ons – many money lenders come up with several add-on services like extended warranty, insurance for the vehicle as well as after-market service. Don’t fall prey to these add-ons. And make sure that the loan is not at all dependent on all these conditions.
Although, it is a challenge to get a car loan with a bad credit record, but you can get it if you have done enough research and you have prepared yourself well.