If you’ve got bad credit, you can’t be faulted for thinking that nobody will give you any loan, even if you need to get on the road for your job. But getting an auto loan is easier than you think, and easier than the conventional wisdom you’ll find online would have you believe. Here’s how to do it.
Know Your Budget
Start with what you’re bringing home every month. After all, there’s no point in buying more car than you need at a price you can’t afford. Sit down with your monthly budget and look at how much you can reasonably set aside for a monthly car loan payment. In fact, you might want to take a moment and set aside that money for a month or two to see how it impacts your lifestyle and financial well-being. This will also help you start saving up for a down payment.
Know What You Bring To The Table
You likely already have a car if you’re considering buying a new one, so take a moment and research its trade-in value. Even older cars will potentially have some value as a trade-in, although you may want to check with local dealerships about what they will and won’t accept. Similarly, if you can save up for a down payment, take a few months to do just that; having cash on hand will help you get a better deal and drive down your overall monthly payment on your car when you buy it.
Know The Market
It might surprise you how quickly auto loans for bad credit are growing, but they are. Even five years ago, credit was tighter for those with poor credit compared to today’s market. This is because as the economy has shifted, auto lenders have shifted with it, and now credit scores are less important than they used to be.
Still, not every lender works with every creditor, so do a little research; look for lenders who have excellent reputations with lenders in a similar credit situation as yours, and similarly look closely for lenders who lack such a reputation. Anything you read on the Internet does need to be taken with a few grains of salt, but look for consistent patterns and other sources, such as newspaper articles and professional recommendations. A little research goes a long way.
Know Where To Get The Most Quotes
Finally, make a point of gathering as many quotes as possible from as many lenders as possible. It used to be much harder for consumers to do this, but thanks to the Internet and a shifting lender market, times have changed. Now, instead of having to send application after application to each individual lender, sites like Federal Auto Loan allow you to send one application to an enormous network of lenders for evaluation and response.
This means much more than just saving you a little paperwork. Being able to look at many lender quotes at once puts the power in your hands; instead of having to laboriously collect quotes, you’re able to look at a full summary that provides you detailed information about each loan. That way, you can choose the best one for your budget, and get the car you deserve.