Seven Steps to Getting a Bad Credit Car Loan BC
Having a bad credit score doesn’t mean you can’t get a loan to buy a car or that you will have to burst your already tight monthly budget to pay for it. There are opportunities for you to get a good deal on a bad credit car loan in BC. Whether you have a low credit score or no credit score, don’t compare your situation with another person’s. Lenders will look at your individual financial history and give you a loan based on your specific situation. Understanding the process and following these seven steps will help you to be successful in getting a bad credit car loan BC.
1. Apply for a free credit report from TransUnion Canada or Equifax Canada and thoroughly examine it. Your credit report contains the information lenders will use to calculate your score, so you want to ensure all information on your credit report is correct. If you find any mistakes, such as incorrectly listed late payments, formally request for them to be corrected. Credit card companies and banks can make mistakes. Gather documents such as proof of residency, employment, income and driver’s license, and you are ready to shop around for a bad credit car loan BC.
2. Assess your financial situation and see if you can take some steps that will help reduce interest rates before you even approach a lender. For example, having a co-signer or providing collateral will mean the lender will look upon you more favorably. Also consider saving up a few thousand dollars for your first payment. Refusing extras such as car alarms and extended warranties can reduce the cost of the car. This may be more difficult, but if you make payments towards any existing loans, it will improve your credit score.
3. Start your search for a bad credit car loan BC close to home. You might be surprised to find that your local bank and credit union offer loan options for people with a low credit score, especially if you’ve been a member for many years. Your insurance company may also be an option because some provide loans.
4. Investigate online organisations as they work with lenders across the country and often provide the lowest monthly payments. Car dealerships offer loans and can be a great option as you can buy the car and get the loan at the same place.
5. Shop around to gain a good understanding of the options you have. Some lenders may look upon your bad credit record in a more favorable light than others. To make a good decision, it’s important to know the various contracts and their conditions available to you. Keep in mind that the best deal possible is the lowest monthly payment for the shortest amount of time.
6. Take a friend or family member with you when you meet with a lender. Having support will give you the confidence to explore the full scope of options available to you. There are honest and unscrupulous lenders, so you need to look out for yourself and ensure the terms you are agreeing to are final.
7. Before you enter into a contract with a lender, make certain you can meet the obligations of the bad credit car loan BC. Just because your credit score is low, it doesn’t mean you have to accept extremely high interest rates, so keep looking until you find a reasonable offer. However, when the terms of a contract are very appealing, it may be warning sign of hidden costs. With a little research and a good understanding of the agreement you are entering, you can find the best possible deal for a bad credit car loan BC and buy the car you need.