Whether you choose to buy a house or car, there’s no denying the fact that a good credit score is your ticket to getting good deals. But poor credit does not mean you cannot get a loan, or one that will not break your budget. Here are five tips to help you find bad credit auto loans:
– A bad credit score isn’t the end of the road:
People with identical credit scores can be viewed differently by different finance companies. They’re more likely to analyze your transaction history, i.e. if you’ve maxed out your credit card, or were late to make a payment. So a credit score that would ideally qualify you as a subprime broker can bring to you a prime or near prime auto loan. A bad credit score is manageable. You can still shop around for a good credit score.
– Shop around:
A ‘good’ bad credit loan is only as good as your ability to shop around and negotiate deals. For example, there are plenty of ‘buy here – pay here’ dealers selling new and old cars at low-interest rates. Check with the dealer if they report payment progress to the credit bureau.
– Get a pre-approval letter:
Fill out an online application to get a pre-approval letter. Your bank and credit union can also offer these pre-approval letters since you’ve made financial transactions with them in the past. These letters can help you get a better deal.
– Pay attention to the loan terms and not monthly repayment:
Go for loans that offer the lowest annual percentage interest over a short time, rather than small monthly payments over a long term. If you cannot afford a short term loan, then you probably cannot afford a car.
– Stay close to your budget:
An upgraded version of the car you want to buy is an offer that’s hard to resist – especially when you’ve been told you qualify for the higher range. Do your best to avoid doing so and stick within your budget.
Whatever you choose, do not forget to read the fine print. Subprime buyers are often led into contracts filled with nonessentials. Similarly, avoid loans that are subject to purchasing add-ons such as extended warranties and insurances.
Author Bio : The Author manages a website specializing in bad credit auto loans. He regularly writes articles to help people find favorable auto loan deals.