Having bad credit shouldn’t keep you from shopping for great car loans. You’ve got plenty of options to get into a great ride at a price you can afford. Let’s go over everything You need to know.
Don’t Let Bad Credit Keep You From Your Dream Vehicle
If you’re ready to get into a great vehicle, but are saddled with bad credit, you’re not alone. An estimated 11.1% of American consumers suffer from bad credit. Unfortunately, a low credit score can sometimes mean limited access to great car loans.
Although your FICO score might not be the best around, that doesn’t mean you have to settle for less when it comes to getting a good loan. Let’s go over some of the best things you can do to boost your chances of securing a great car loan for your new ride.
Planning for a car purchase is key when you have poor credit. When you start your planning process, do your research and determine the budget you can afford. This will allow you to have a clear picture of your goal so that you can take the right steps to achieve it.
As you plan, research average car loan rates for someone with your credit history, and know where you stand in the mix. This will give you a range to aim hopefully higher than once you start your search for a good lender.
Save up a Heafy Down Payment
The further out you plan your purchase, the more time you can spend saving up for a hefty down payment. If you have a solid down payment in hand, this will increase your chances of finding a lender that will work with you at a favorable rate.
Many reputable dealerships will take a good-sized down payment as a sign of your credit worthiness even if your actual credit score doesn’t necessarily reflect that. Plus, the larger the down payment you have in place, the smaller the loan amount you have to take out. If you keep up with your car payments regularly and on time, you’ll even be able to boost your credit score higher along the way.
Shop Around With Different Lenders
Just because you have poor credit doesn’t mean you’re limited to just one lender. You should still shop around to get the best rate available despite your poor credit score.
Don’t settle with just any lender as you shop around either. Give your attention to reputable lenders that friends and family have recommended to you. Shop around locally and request rates from your local dealerships and local banks. Of course, don’t discount reputable online lenders either. If you do the online route, just make sure that you’re speaking with a reputable Institution that is property vetted, is highly reviewed, and has a high BBB rating.
Trade In Your Used Vehicle
Despite having a poor credit score, there’s always ways to help boost up your loan rate. Oftentimes, this means focusing on how you can minimize the loan you take out in the first place. One of the easiest ways to do this is by trading in a used vehicle. Depending on the make or model you have, your pre-owned vehicle might be able to fetch you a hefty down payment to use on your new purchase.
As with shopping around for the right lender, be sure to shop around for a good trade in value. Check with your local dealers and compare all available quotes. Online dealers can also be a great way to get higher trade in-values. If you’re looking to get the most for your used vehicle, operating as a private seller can be an optimal route to go down as well.
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