Factors to Consider When Applying for Bad Credit Car Loans

7 October, 2014

Buying a car is usually a very frustrating experience. It can prove to be even more frustrating if your credit score is not all that impressive. Bad credit is never bias or prejudice, it can happen just to anybody at any time. The good news is that given time and determination on the side of the client, this can always be improved. When applying for bad credit car loans, the following guidelines may help you get cheaper loans despite your poor ratings.

Rule number one in every purchase is always to shop around. Despite your poor rating, you will still find that lenders will charge you different interest rates for the loan. By comparing, you will be able to choose the cheapest lender. This is because different lenders will always view your poor rating differently. To some of them, it may not be that bad and they may just give you more affordable loan.

You also need to check your credit report for any errors that may appear on it. The fact that you are lowly rated by the lenders should not deter you from looking for any error in your report and dispute them. Statistics show that most people whose ratings are low is majorly due errors in their reports. By correcting these, you stand a chance of getting the loan at a reduced rate.

Not known to many people is the fact that short term credits are always cheaper. Most people would be scared by large monthly installments that short term credits attract. As such, they would opt for long term credits with low installments. However, this is likely to be more costly in the long run.

Some lenders usually demand for down payment. This is however not a general pre qualification condition. However, it is advisable to save a down payment if you can as this will lower the amount you have to borrow. Lenders usually find it less risky to lend out small amounts of money. As such, they may even charge you low rates if you are not borrowing very huge amounts.

If you have been borrowing and repaying loans well from a particular lender or bank, they may be willing to listen to you with your damaged score. Some lenders only emphasize on how well you have serviced their previous loans and not necessarily your score. You should therefore stick to your current lender more so if he/she is affordable.

Having a guarantor may also improve your chances and lower your rates. The guarantor usually assume the remaining balance should you default for whichever reason. Because of this, the risk to the lender is usually reduced. In order to qualify for affordable loan, you need a guarantor with good score.

Purposely failing to pay your responsibilities is usually not the only way that may land to poor rating. Lose of job, divorce or even being injured are some factors that may quickly drive you to poor score. By observing all the above tips when in need of bad credit car loans, you will be assured of loan with better terms despite your poor rating.

If you need a vehicle and have poor credit, bad credit car loans are available at www.newstartautoloans.com. You can finance your next car purchase when you visit http://www.newstartautoloans.com today.

You Might Also Like

Comments are closed.