Bad credit auto loans can serve two purposes:
Start with building a “Simple Personal Budget” to pay your bills and see what monthly payments you can afford.
Figure in car expenses such as regular maintenance and fuel costs. This will help you understand your ability to pay back the loan as well as your other commitments.
Online car finance calculators can be a great help when figuring how much you can afford towards a car loan. Consumers should know that saving up even a small down payment can help lower rates and improve payment terms.
Give A Down Payment
With high risk auto loans, some loan officers are unlikely to give out at loan to a person in a horrible financial situation and no cash upfront. You should try to give a down payment on your purchase. To do this, you should try to save $500 a month for a few months. Then, when talking to the loan officer, you can mention that you will put a couple of thousand dollars on the car.
Our “Simple Budget” can show you how to get extra money out of your paycheck.
Without a doubt, when doing this wisely, you can get a great deal on your loan. Not only that, with a proper down payment, you are unlikely to end up with financial problems in the future.
However, if this is not an option at this time, ValleyAutoLoan.com can offer no down payment loans, if this is a better fit for your needs. You should check all the possibilities before taking a loan without paying a down payment.
When you have a poor credit score and want to get a car, you may have to be flexible on your purchase. You may need to provide a higher down payment with high risk loans. In other cases, you may have to take on a longer loan to meet the terms.
At the same time, you should not accept any car deal offered. Instead, you should understand it is wise to find a good deal and avoid giving a massive down payment or getting an extended auto loan.
Apply for your loan first, and then pick the car that matches the loan amount. You can get a great deal on your loan and walk out with the car of your choice.
Temper Your Expectations
If you have bad credit, you will have a hard time getting a luxury car or high-end sports car approved. While this is true, with a low credit score, it is still possible to get a low rate on a great car. For example, by looking at simplistic mid-sized vehicles, you can get a great deal and enjoy something that will not kill your monthly cash flow. You can buy an inexpensive car offering safety and reliability.
Get A Cosigner
If you have poor credit and a sub 550 credit score, you may want to consider other options. Of course, one great way to land a car loan is to ask a friend or family member to co-sign.
When doing so, you can get great rates, especially if they also have a high score. To do this, you should talk to your friend and mention your situation.
You can avoid a significant amount of problems getting qualified for your loan with a cosigner. While doing this, you must agree that you will have no issue in repaying the loan. Otherwise, if you are not honest or make a mistake, you may end up causing problems in your relationship. Simply put, this should be done as a last resort.
Clean Up Your Credit
If getting a high risk car loan with bad credit and no cosigner is your only option, you may want to consider cleaning up your credit score. If you have an extremely low one, you will have a hard time getting a loan. If you have charge-offs and other negatives, you will have a nearly impossible time getting a loan you can afford.
To fix your credit, you should call your creditors and work on a payment plan. Other times, if you have some money, you can offer a lump sum payment to pay off your debt.
If you have several credit cards that are near their credit limit, you could try to get your credit card company to raise your credit limit on those cards. If they do, your credit score will automatically go up.
Of course, if your situation is harder to fix, you may want to contact a professional who can help you clean your credit. Sometimes, there might be mistakes on your report, and you can resolve the problem by calling the bureaus and removing incorrect items on the report.
With better credit in the future, you can at least, apply online to refinance your auto loan with high risk lenders and get a better deal.