Tips that can help you get approved for a bad credit auto loan
The following are a number of tips that can help you get approved for a bad credit auto loan. While these tips aren’t infallible, they really can assist you with your credit and with getting a loan:
Step 1. Check your credit reports. Checking your credit is the first step towards getting approved for an auto loan, if you don’t have good credit. To do this, first request your credit report from one of the three credit bureaus. Once per year, you can request copies of your credit report at no charge. When you have gotten your copy of your credit report, be certain to check each of the entries on the report.
Step 2. Fix errors on your credit report. Should you discover any errors or problems with your credit report, be sure to follow the instructions provided to you by each credit bureau to get the errors removed or changed appropriately.
Step 3. Talk to a finance expert. When you’ve made any appropriate and necessary corrections to your credit report, you should then consider reviewing your credit situation with a finance expert or money tutor. This is especially important if you are in a bad credit situation.
Step 4. Consider reputable credit repair assistance. In a bad credit situation, you may want to consider working with a reputable credit repair company. Make sure you do your research to find out which ones are good and will do a good job for you.
Step 5. Save money for your down payment. Note that in a bad credit situation, lenders will typically want you to provide a larger down payment. Given this, the size of your down payment could make the difference between getting approved for your vehicle loan or being denied. So, make sure that you save money for a large down payment on the vehicle you are looking to purchase. Lenders will look at your application in a more favorable light if you have money or “real trade equity” available for a down payment when you are borrowing to pay for a car. As a general rule, the goal should be to have at least 10 percent of the car’s total price set aside for your down payment.
Step 6. Get a cosigner. A cosigner can help a lot if you are in a bad credit situation. A cosigner agrees to, effectively, borrow the money along with you when you are borrowing money for your car loan. Cosigners can make a big difference in helping you to qualify for your vehicle loan.
Note that when applying for bad credit, auto loans at one of your local dealerships, it is important for you to keep in mind that the majority of subprime lenders will only work through franchised car dealers, which means, by and large, they do not lend directly to customers. Unfortunately, this can make finding bad credit, auto financing quite challenging. Fortunately, here at Federal Auto Loan, we specialize in helping you locate these types of dealers. It only takes a few minutes to apply online for an auto loan with bad credit.