If you have bad credit and are looking to get an auto loan, you may find it difficult to finance a car traditionally, but there are subprime lending options available for individuals with blemished credit. If you have a credit score below 620 and a history of late payments, then subprime auto financing is your main option and it is simple to get approved.
Begin by getting a copy of your credit report yourself. This is a good thing to do whenever you are planning a major purchase. Check the report for inaccuracies, as you may be charged for something that is not yours or is a mistake. These inaccuracies should be reported to the credit-reporting agency.
Many banks will aid their current account holders in re-establishing their credit. If the applicant has direct deposit with institutions and will allow payments to be set up so that the payment is automatically withdrawn. This helps your credit by re-establishing a good payment history.
Be realistic in the price of a car that you can afford. Visit your lender and get pre-approved for the car loan before you go shopping. Avoid financing through the car dealer itself because you are not going to get the best deal on interest rates and financing. If you are pre-approved you also have a better chance of negotiating on the price of a car.
Try a down payment. Another great thing a person with poor credit can do to get approved is to offer a down payment and secure the loan with the car as collateral. By offering a down payment you are reducing the amount of money that you will need to borrow and you may be able to negotiate a lower interest rate. Using the car as collateral can also lower your interest rate because you are not going to be as high a risk to the lender.
No comments:
Post a Comment