100% Bad Credit Car Loan Application Acceptance How To Get A New Car with Bad Credit
If you are like many Americans, then you most likely have a credit score that is less than perfect. Being late on payments, defaulting on loans, declaring bankruptcy, and many other factors can have negative impacts on your credit score. While a less-than-perfect credit score is not the end of the world, it certainly can make getting approved for a loan difficult. Often times, those with credit scores under 600 have a hard time getting approved for loans or get approved for unattractive loan terms with sky-high interest rates. If you are looking to get a new car with bad credit, then you may be wondering how to go about getting reasonable financing. Fortunately, there are some ways to go about making this happen.
Save Up for a Down Payment
For starters, you should make as large of a down payment on the car you end up choosing as is comfortably possible. Of course, you should not completely deplete your savings account in the process of making your down payment, but you should save up as much as possible so as to reduce the total amount that you need to have financed. Not only will a larger down payment reduce your chances of being upside down on your car loan, but it will also reduce the total amount that you end up paying in interest over the term of the loan.
By making a larger down payment, you also have a better chance of being approved for financing, since the amount you need to borrow will be significantly less than if you were to make a small down payment or none at all.
Find a Cosigner
Even if you make a larger down payment, you may still not be able to get approved for a low interest rate as a result of your poor credit history. If this turns out to be the case, you may wish to seek out a cosigner to sign onto your vehicle loan with you. If your cosigner has a higher credit score, that can be used to get you approved for lower interest financing on your car. Often times, family members and even close friends may be willing to cosign on a loan with another person, but it is important that both you and the cosigner realize the responsibility being taken on by doing so. In the event that you fail to make payments on your loan, for example, your cosigner’s credit rating could be negatively impacted.
Even with a very low credit score, getting approved for a new car loan is typically not difficult. Lenders and dealerships alike offer guaranteed financing these days regardless of an applicant’s credit history. The difficult part when it comes to having a bad credit score is getting approved for a loan with a low interest rate.
To guarantee that you have the best chances of being approved at a low interest rate, you should start by getting pre-approved with an online lender. Often times, all this takes is filling out and submitting a brief application with some personal information online. From there, most applicants can get instantly approved. Your interest rate on your pre-approved loan may not be the greatest, but it can be used as leverage when you visit a car dealership. All dealerships ultimately benefit from having car buyers finance through them as opposed to using another lender. Therefore, you can use your pre-approval terms to talk the dealership down as much as a couple of percentage points on your financing.
Research Fair Purchase Price
In order to pay as little as possible on your new car over the loan repayment period, you will not only want as low of an interest rate as possible, but as low a purchase price as possible on your new car. Research fair purchase pricing for your vehicle using the reputable Kelly Blue Book and other car comparison websites before you visit a dealership. Be sure to bring print-outs of the pricing information you found when you meet with a salesperson so that you can be sure to get the absolute best price on your new car.
Overall, getting approved for financing with poor credit is not always easy. Fortunately, there are steps that even those with the lowest credit scores can take to lower interest rates, enjoy guaranteed approval, and drive off the lot in the car of their dreams. Not to mention, it is possible to rebuild one’s credit gradually by timely repayments on one’s car loan over time.
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