Car Loans with Bad Credit
There’s no doubt that it’s harder to get car loans with bad credit than it is to get loans when you have good credit. If you haven’t paid your bills on time, lenders aren’t exactly jumping at the chance to work with you. Unfortunately, a car is practically a necessity in many areas, and few people have enough money saved to pay cash for a good used car. If you’re looking at applying for car loans with bad credit, follow these steps to get the best deal.
Check Your Report
You might think that your credit is bad, but you won’t really know what lenders are seeing until you order a copy of your credit report. For instance, some people are surprised to find that their credit scores are good despite struggling to make ends meet. If you’ve consistently paid your bills on time – even if it was just the minimum balance – your score might be better than you think. On the other hand, others people find their score lower than expected due to mistakes on the report or cases of stolen identity. These issues can be easily repaired. You can order a copy of your report online for a fee or by mail. (https://www.ic.gc.ca/eic/site/oca-bc.nsf/eng/ca02197.html)
Save Up a Down Payment
Lenders want to see that you’re serious about paying them back. When you have bad credit, one of the ways that you can increase your position in their eyes is to have a sizeable down payment. In fact, many lenders that allow you to get car loans with bad credit will require a minimum down payment, usually around $1,000.
Those needing car loans with bad credit will often do well by applying through their own bank first. Banks often have special deals for good customers and they may be willing to overlook some financial mistakes if you’ve had a good relationship with them. However, this doesn’t mean you should take the first offer that comes your way. Even if your bank approves your loan application, you should try applying through a few different banks. You might just get a lower interest rate elsewhere.
Be Wary of Unscrupulous Lenders
Unscrupulous lenders are those that specialize in lending to people with bad credit. They often have a lot of tricks up their sleeves, including high application fees, high interest rates and fine print that allows them to change the terms after you think the deal is finalized. If you’re not able to get a loan through traditional means, you can consider these types of lenders, but ask a lot of questions and read the fine print carefully.
If you need a car loan, your bad credit won’t necessarily hold you back. Try applying for different loans to see where you stand and go from there. One great place to start looking for car loans with bad credit if you live in British Columbia is BC Auto Credit.