Tips for Getting a Car Loan Despite Bad Credit

No matter how many times you wish upon a star, chances are you will never end up with your dream car for free. Your fantasy ride needs to be earned, and those with blemishes on their credit report may find it extremely challenging to secure the financial resources they need to purchase that car they have had their eye on. The good news is, although securing a car loan with bad credit may be challenging, it is not an impossible task as long as you know how to properly navigate the system.

The first thing a consumer with bad credit should do is be aware of the situation and address it properly. Ordering your credit report annually and working with your existing creditors to pay off your old debt is generally the best and most responsible way of handling a bad credit situation.

But what if you need a car quickly and there is no time to work towards increasing your credit score? Then there are some simple tips you can follow to increase your odds of getting an auto loan with a low interest rate.

  • Always shop for your auto loan prior to going to the dealer. By taking the time to research your auto loan rate options before stepping foot in the dealership, you can comparison shop for the best deals out there and not feel pressure to take a high interest car loan directly from the dealer’s financing office
  • Making a large down payment on your car purchase will not only help you build more equity in the vehicle, but can provide the lender with a sense of security. Plus, with more money down, your loan amount will automatically be smaller and more easily managed over time.
  • Opt for a secured auto loan using collateral as a way to get a lender to provide you with the financing opportunity
  • Get a financially responsible person with excellent credit to co-sign your auto loan. When a loan is co-signed, not only is your credit history going to be evaluated, but the past behavior of your fiscally responsible pal will positively weigh into the overall equation
  • You can also find car loans that do not require a credit check at all, but for that luxury you will pay significantly higher insurance rates
Save for Your Future

Clever consumers can find a myriad of ways to secure an auto loan even if their credit history is not up to par. Regardless of what option you use, make sure to check the time to comparison shop for the best loan possible. The great options out there may surprise you!

If you’re looking for the best auto loan rates available, please visit Go Banking Rates often as rates are subject to change daily. With our auto loan form filled out, you’ll be provided with multiple quotes from leading lenders in a matter of minutes. The process is secure and 100% free.

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GOBankingRates Staff

These articles are written by the in-house GOBankingRates team.

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