How To Get A Car Loan with Bad Credit
Coming up with the cash to buy a new car can be a challenge. If you need to sell your old junk car fast, check out this site to learn the facts about selling your junk car. Selling your old car may get you enough cash to make a downpayment on a newer vehicle. However, you’ll still likely need to take out an auto loan in order to cover the remainder of the new vehicle purchase price.
There’s just one problem, though: how do you get a car loan if you have bad credit? Sure, some of us are lucky enough to have amazing credit, and that makes getting an auto loan pretty easy. If your credit is less than perfect, though, finding a lender that’s willing to work with you can be quite the task.
We’ve put together this blog post to walk you through your options for getting a car loan with bad credit. Keep reading to find out more.
Paying Down Balances
Before you move forward, take a moment to consider whether you have any extra cash on hand. If possible, one of the best things you can do before taking out a new auto loan is pay down some of your existing debt. By lowering your debt-to-credit and debt-to-income ratios, you can dramatically improve your credit score in a very short amount of time.
Taking this simple step can make it a lot easier to obtain a new vehicle loan. Plus, you’ll likely be offered a lower interest rate due to your improved credit score. Even a minor difference in interest rate (such as a percentage point or two) can save you quite a bit of money over the long haul.
Bad Credit Auto Lending Options
Whether you’re able to pay down some of your outstanding balances or not, the next thing you’ll need to do is find a lender who’s willing to give you a loan. You can look into the following three options:
- Lead generators
- Large banks
- Special lenders
Lead generators are websites dedicated to matching car buyers with potential lenders. One of the big advantages of using such a website is the fact that you’ll be put in touch with lots of lenders simultaneously. This will make it easier to compare rates between various lenders before making a decision. A Google search for “auto lenders” will likely turn up quite a few lead generator websites. Just keep in mind that not all lenders will want to work with someone who has bad credit.
You may be surprised to learn that large banks are sometimes willing to work you, even if you have subpar credit. Remember, larger banks are somewhat insulated from individual borrowers defaulting on their loans due to their sheer size. As a result, it’s worth contacting some national lenders in your area and inquiring about your auto loan options.
Lastly, some lenders specialize in providing loans to people with bad credit. A number of companies are focused specifically on the auto industry. Again, a Google search will turn up plenty of results. Just remember: some special lenders will try to charge outrageous interest rates. Beware of an interest rate that costs you thousands of dollars over the life of the loan.
If you have a junk car on your hands, selling it for cash is a great way to pay down a big chunk of your auto loan. Junk A Car pays cash for junk cars nationwide, and we’re ready to take your junk car off your hands today! Contact us to find out what your junk car is worth.