Thousands of people each week acquire a new auto loan. There are also a multitude of individuals who are on the third, fourth, or fifth year of a current auto loan on which they are making payments. This indicates that car loans are relatively common. If nothing else, this should prove to anyone that you can get a car loan if you have bad credit.
However, for those with bad credit, this way of acquiring a vehicle may not be as easy as for those individuals who have perfect, or near-perfect credit. Many people in this position are automatically passed by with regard to such a loan, due to credit problems.
One’s credit score plays a big role in determining whether he or she will be approved or rejected for car loan, but there are certain things a person can do in order to help remedy this situation.
One of the biggest things that keep people from getting a loan for a vehicle are bad student loans. Whether they are behind on their loans or they have defaulted, having evidence of a bad student loan can hinder you from getting a loan for a new car.
My advice would be to deal with this first, before trying to obtain a loan. It will be much easier if you have this black mark removed from your credit report. And don’t think you can go bankrupt on your student loans, because you can’t. The best thing to do is to bring them up to current.
Many people are unaware of the fact that a low credit score does not automatically stop an individual from acquiring a loan. There are certain auto lenders that actually cater to people with bad credit who are in need of a new car but must have a loan in order to obtain one. There are several steps one can take in order to obtain a loan despite a bad credit score:
One must first acquire a copy of his or her credit report. This does not mean simply the FICA score, but the actual report which contains the individual’s full credit history. This way one can review, in detail, his or her entire credit history, and thus, be prepared to answer any questions a lender may ask with regard to his or her past borrowing history. It is also beneficial to review the report in order to determine if it contains any obvious mistakes that one must correct.
The next thing a prospective loan applicant must do is widen the playing field a bit. This means, rather than acquire the loan at the first bad credit car financing agency one visits, several lenders should be considered and their rates compared in order to determine which is best. Such lenders specialize in helping those with bad credit to secure loans, and as such, are very competitive.
The final consideration is the cost of the car. If one selects a car that is reasonably priced, he or she has a much better chance of securing a loan, than if it appears to the lender that he or she is determined to acquire a dream car regardless of whether or not it is affordable.