If you don’t have great credit, you can have a tough time securing many financial products. One of the products you won’t have a problem getting, though, is an auto loan for bad credit. Here are just five reasons an auto loan with bad credit is not just possible, but even fairly common.
You’re Not Alone
It can feel like you’re alone in having bad credit, but believe it or not, your neighbor down the street, your boss, more people than you think are still recovering from the effects of the economy, or medical bills, or a host of other concerns that have dinged their credit. Just by sheer numbers, more Americans have less-than-perfect credit, and so, lenders have found themselves shifting the goal posts for auto loans.
You’re More Likely To Pay Your Loan
Another factor that make car loans easier to get than many other financial products is that people are just more likely to pay their car loan. The reason why is really fairly simple: Many of us rely on our cars to get the kids to school, groceries in the houses, and us to our jobs. So, keeping current with that monthly payment is foremost in the minds of many of us, and as a result, issuing a car loan has a much lower risk for lenders.
You’re Buying A Tangible Item
Many people base their assumptions on how lenders will treat them on whether or not they can get a credit card, but a car loan has a few crucial differences. First of all, it’s a set amount you’re borrowing, and you’re not asking for a license to borrow. Secondly, as we noted above, people prioritize their car payment, financially speaking. Thirdly, it’s got a term; you’ll only be making so many payments. In short, issuing a car loan makes good financial sense even for lenders who wouldn’t consider you for a credit card. That makes securing an auto loan much easier for everyone.
Car Loans Are Increasingly Used To Repair Credit
It seems odd that buying a car would help you fix your credit, but, in fact, it can be a recommended tactic. Why, precisely, boils down to how your credit score is calculated. Being able to both take out a relatively substantial loan and pay it consistently allows credit bureaus to begin recalculating your score and change how you’re seen by lenders. As a result, car loans have become more popular, making them easier for those of us with bad credit to get.
There Are More And More Lenders
Another important factor is that, especially over the last decade, the landscape of car loans has changed substantially. Even fairly recently, you had your bank, your dealership … and that, for many of us, was pretty much the end of the list. Now, there’s a universe of alternative lenders that you can reach out to and find a loan with. That lender diversity means you can not only find somebody willing to work with you, you may even find someone who specializes in it.
In short, if you need a car loan, you can probably get one. So why wait? Apply today!