Getting a car loan with bad credit is very challenging. This is because not all lenders are willing to provide you with a bad credit car loan. But this doesn’t mean that you will not be able to obtain this type of loan. You only need to be patient and resourceful in order to find a specialized lender that could provide you with the needed loan. However, you should also make sure that you would qualify for this.
You might want to try out a credit union such as https://www.fhfcu.org/lending-auto.htm in order to help you get the loan in an easy way.
In order to help you, this article provides some of the tips on how to qualify for the loan and these are the following.
1. Know your latest credit score
One of the most important things that should be done to qualify for a bad credit auto loan is to know your latest credit score. You can actually do this by requesting a free copy of the report from one of the credit reporting agencies through their websites.
As soon as you have obtained the credit report, check your latest score. In case your score is below 600, try to increase this first before applying for a new car loan. You can increase your score by paying some of your existing financial obligations off. The more loans you pay off, the better your score becomes.
2. Visit some of the largest car dealers a week before the month ends
Visit some of the largest car dealerships in your area. Try to do this on the last week of the month or a few days before the month ends. By doing this, you might get a chance to obtain a loan from these dealerships despite of your low credit score since most of them need have higher quotas to fill to obtain bigger bonuses from car makers.
Larger car dealerships are usually eager to provide the best new car deals although your credit is not that good since they want to move more of their cars out before the month ends to earn these bonuses. In addition to this, larger dealerships usually have special finance departments that handle creditors just like you.
3. Provide a higher down
Dealerships might also provide you with a loan when you offer a higher down payment. In fact, one of the first questions that the dealerships would ask you is how much you are going to pay for a down.
In addition to this, lenders are also encouraged to provide a loan most especially when you are willing to provide a higher down. By doing this, they would think that you will not provide such high amount and stop providing payments afterwards.
4. Look for a co-signer
Looking for a co-signer with a good credit score could also help increase the chances of getting a vehicle loan. The higher the score the co-signer possess, the greater the chance of your loan approval becomes.
The loan’s approval is quite possible when you provide a co-signer with good credit score since you have someone to share the loan obligations with. In case you fail to provide the monthly payments, the co-signer pay for these in your behalf.