To purchase a car with poor credit might feel impossible. Don’t let that feeling fool you. It can be a challenge at times, but it’s not even close to being improbable. In fact, with many people trapped with bad credit, it’s more common than you think to be approved of bad credit car loans. By no means should your credit history determine whether or not you have reliable transportation. Here are three tips to remember when considering a car loan.
There are many dealerships and lenders that offer car loans to people with poor credit scores. You never have to settle for the first one that you come across. The best course of action is to look around and compare rates. You should find out which lender will offer you the best rate at the lowest interest. Dealerships don’t look at every client with bad credit the same way. Some may consider one score to be less optimal than another and may have different terms and conditions. Always take a look at your options.
Look at Loan Terms
It may be appealing to go for a loan that has a lower rate over a longer time period. This can lead to you paying more money than you would have if it’s a loan that has a higher rate over a shorter span of time. Make sure that you are looking at the loan as a whole, rather than just the monthly payments.
When it comes to credit scores, bad credit isn’t always what it seems in auto loans. In fact, what would be considered bad credit for a mortgage may actually be adequate for a vehicle. If you have bad credit, keep this in mind. If you apply for a loan for someone with poor credit, you may get worse terms than if you tried for a better loan.
Bad credit can be a vicious cycle. You have bad credit, so you can’t get credit. You need credit to finance your car to get to work to keep your credit from getting worse. Sometimes, you just need someone to help you get back on your feet. That’s where we come in. We have bad credit car loans that will help you get a car to get to your job and keep the bills paid. Let us help you find the car you need and rebuild your credit.
If you are looking for a car loan, you should make sure that you have done all you can to fix your credit. Make sure that you correct mistakes. Know what is on your credit report so that you can explain the reasons you got behind or have the bankruptcy. It shows that you are being proactive and trying to fix the problem. Having a stable job history and regular income will help establish your ability to pay. Bad credit car loans will also require a local residence.
You should also be realistic when you are getting financing for your car. How much can you really afford in monthly payments? Know your budget before applying. You may want to get pre-approved for the financing, so that you only look at cars that fall within your budget. You do not want to fall in love with a car that is more than you can pay for.
When you make payments on your bad credit car loan, this helps you rebuild your credit. It can be more time-consuming to find a car loan when you have bad credit, but it is worth it to maintain the ability to get to work. You do have options when your credit is not that great, but you will need to take steps to show that you are making changes to your finances. Find an auto finance company like ours that works with bad credit car loans to help you fix your credit.
As you’re looking at the perfect new car to buy and figuring out financing, it’s a good idea to think ahead about paying off your car loan. Car loans might be a part of life, but that doesn’t mean you have to spend more years than necessary paying them off. Here are a few methods you can put to good use to become the legal owner of your car ASAP.
Make Principal Payments
Depending on your lender, you might be allowed to make principal-only payments. If so, take full advantage of it. What that does is cut down on the amount of interest being applied to the total remaining loan, and you pay your loan off faster.
Pay Your Loan Twice a Month
Another good idea is to split your monthly car loan in two, making a payment twice a month. The reason this is a good idea is that you make 13 payments a year rather than 12. Not only do you pay your loan off faster, you also save money in interest.
Round Your Payments Up
When it’s time to make your car payment, round up to the nearest $50 whenever possible. You can combine this tip with the one above, splitting your payment in two and adding an extra $25 to each.
Use Extra Cheques, Bonuses and Tax Refunds
After a while, paying your car loan can become just another monthly financial obligation to take care of. This means you might forget about it when you get an extra check, your tax refund or a bonus at work. When you do get some extra cash, stop for a moment in your excitement and think about how you can best use those extra funds. While making an extra car payment might not be as exciting as a new pair of jeans or home renovations, your future self will thank you.
A few tips and some strategizing are all you need to pay off your car loan early. Be sure to put these suggestions to good use.
When getting car loans, the most common financing option is to work with an auto finance specialists like us. We can offer you great terms and put you in a safe and reliable vehicle. However, be sure you do your homework to work out the best deal for you. Avoid these costly mistakes and you’ll be alright.
Not Knowing Your Credit Score
A seedy dealer will try to tell you your credit is worse than it is, but even with a reputable auto finance company like us, knowing your credit score will put you on equal footing so you can negotiate a price on your own terms. You should know not only your score but any blemishes you might have. If you explain good reasons for a setback in your score, we may be willing to work with you despite the number.
Not Negotiating Loan Terms in Pieces
You don’t want to negotiate your loan in terms of monthly payments alone. You’ll likely end up with a longer loan period and have to pay a fortune in interest. Instead, talk to us about each section of the process separately – trade-in value, price and financing. You’ll have a good chance at getting a good car at a great price.
Not Choosing Correctly Between Low-Interest Loan and Cash Rebate
If you have great credit, you may be offered a low-interest rate for car loans, but should you take that over a cash rebate? Do your research and figure out which will save you the most money as offers vary.
Not Purchasing Add-Ons Separately
Paying for add-ons up front instead of adding them into your loan can save you hundreds of dollars over the term of your financing. If you can’t resist things like fabric protection and extra sealant on your paint job, be sure you have the extra cash to put towards it on the down payment.
Car loans don’t have to cost you a lot of money on top of the price of the car. By avoiding these costly mistakes, you can keep your financing at a price you can afford so you can pick the best vehicle for your budget.
Most families today have at least two cars because they are a necessity. Maybe both parents work, or teenagers have activities they need to get to. For whatever reason, multiple cars in a family is becoming the norm. Are used cars the right choice for your family?
Ask Yourself How Much Driving Will be Done
Buying used is often a good idea if the car won’t be driven for long distances. If it will only be used to and from school and activities, a low-mileage used car may be the ideal solution for the student in your family. Many older cars are just as reliable as new models, but with a much lower sticker price. The same goes for anyone commuting a short distance to work.
Consider the Insurance Costs
Insuring a new auto is often, but not always, more expensive than insuring a used car because it’s worth more. There are exceptions, such as when a new car has extensive safety features, but if you’re considering a used car and new car that are the same make and model, the one that’s just a few years old will probably be less expensive to insure.
Will More Than One Person Drive the Car?
How long will you keep the vehicle if you buy a used model? In many families, used vehicles are used for more than one child. If you have two or more teens who will need wheels within a few years, it’s a lot easier to buy a third car when you can hand a gently used model down to the newest driver.
Consider Repair Costs
Used autos tend to need more repairs, so be sure to consider repair and maintenance costs as well as car price and insurance costs. Buying a gently used model that has a good maintenance record can reduce repair costs.
Consider all costs, not just the sticker price, to decide whether used cars are the best choice for your family’s transportation needs.
When you need to buy a car, but your credit’s bad, you may struggle to find a loan at all, let alone one with the type of terms you can live with. However, there are some things you can do to ensure that you’ll be eligible for bad credit car loans.
Work Toward Improvements
Even though you have bad credit, you can turn it around enough to at least show some improvement. This single step may help you work out better terms than you might expect from a so-called “bad credit loan.” To complete this step, check out your current credit score. Sometimes, the reporting agencies will also provide tips on how you can improve your score. Within months, you should see some progress, and this can help you get into a better loan situation.
Don’t Rack Up Inquiries
Did you know that every time you apply for a loan, your credit score takes damage? If you head into one credit purchase after another, you’ll end up damaging your chances of getting any loans, even those that are intended for people with low credit scores. When you’re ready to shop for a car, don’t open up an account at your favorite shopping center.
Don’t Be Misled by Low Interest Rates
Loans with longer terms generally have lower interest rates. Short-term loans, on the other hand, have higher interest rates. In many cases, in spite of those higher rates, you’ll still spend less when you choose the short-term loan. If you can’t qualify for one of these loans, be sure to check about an early pay-off penalty, so that you’re free to pay off your debt as quickly as possible.
Make All Your Payments On Time
As you’re working hard to improve your credit, you may be tempted to pay more towards one loan and let other loans suffer. However, every late payment can damage your credit score. This is especially true of any mortgage payments.
As you work toward improving your credit to the point that you can get a loan for that car you need, carefully stick to good credit principles. In time, you’ll have a score to be proud of.