No matter what your financial situation is, the reality is that you probably need a car to get to and from work, school and around town. If you have had a bit of a rough spell with your credit, it can be very difficult to get back on track, get the best car loan rates and purchase the reliable vehicle you need for every day commuting. That’s where bad credit lenders come in.
What to Look For
If it is time for you to make a new car purchase, the first step is to ensure that you can get financing with one of the many bad credit lenders around town. Fortunately, many people consider a car loan a great way to rebuild your credit due to the relatively low risk involved, and the wide range of cars available at all price points. Your chances of getting fair car loan rates are pretty good if you take the time to research your options. Start by searching online for lenders in your immediate area. Most of these lenders will specify if they offer products and services specifically designed for people with bad credit.
Getting Your Car Loan Rates
Fortunately for you, most lenders publish their car loan rates online along with information on how to apply, or they allow you to fill out a quick application online and receive a quote. You can get pre-qualified or pre-approved for a loan almost instantly, or they can put you in touch with a lender who can help you out. If you already know your credit history has some rough spots you won’t be surprised to see that your rates will be higher than what many dealerships advertise as their very best, but you can still qualify for a reasonable rate that offers low monthly payments within your budget. They key is to make sure you know how much you can take on before you go in, and don’t overspend once you get there.
Rebuilding Your Credit
The best news of all is that once you have gotten a car loan in your name, you will start seeing a positive change in your credit score in just a few short months. After about six months of on time payments and lowering your balance, your credit score will begin to rise. Depending on your current credit score it may take a while to get your score back up to the national average, but you will likely start seeing offers for refinancing and better car loan rates along the way. Once lenders have established new trust in your ability to pay your loans regularly, the variety of loans open to you will expand drastically.
In the beginning, finding car loan rates can be a daunting task. You may be disappointed to see that your payments will be a little bit higher than you expected, or that you don’t qualify for the special offers that many dealerships talk about. The reality is that those rates are reserved for the top borrowers, and most people end up with a higher rate than that. Your credit history may mean that you pay more for your car in the short term, but after some diligence you can move to a lower interest loan in the future.