Can I Get An Auto Loan With Bad Credit?
When you have really bad credit, you know that it’s hard to find a car loan. Even people with relatively few mistakes on their credit report know that it’s next to impossible to qualify for a car loan. Unfortunately, the only way to improve your credit is to get a car loan so you can go to work and dig out of debt. That means you need to find a car loan while you still have bad credit.
What is Bad Credit?
A lot of people are surprised when they find out that a car dealership believes they have bad credit. While some people have made some obvious mistakes, others are surprised to learn that a missed payment a few years ago disqualifies them from getting the best auto loan rates today. Many banks use a different system for evaluating credit when a person is applying for an auto loan than they do when that same person tries to get a credit card. These systems usually give more weight to mistakes made with previous auto loans. The result is that many people who can get a credit card or even a mortgage are barred from getting an auto loan.
Where do I Get a Bad Credit Car Loan?
Most bad credit car loans are offered by the same lenders that you can get a standard car loan from. Typically, these loans are not directly identified as bad credit car loans. They’re simply presented as an option when you fill out the credit application at your local dealership.
What Can I Expect from a Bad Credit Car Loan?
Bad credit car loans almost always have higher interest rates than the loans offered to people with good credit. Expect to pay anywhere from one to five percentage points more. Furthermore, these loans often have more fees and stipulations attached to them. For example, many of bad credit car loans will require a down payment, although in many cases this can be paid for with the money received from trading in an old car. These loans may also require a borrower to make weekly payments and/or agree to terms that require a shorter period of time between a missed payment and a repossession.