How to Get the Best Possible Used Car Auto Loans With Bad Credit
If you have bad credit but need a car so you can get to work, participate in activities, and raise the quality of your life, you can still get used car auto loans. There are lenders across Canada who will give you a second chance. Lenders look at your ability to manage your present financial situation by seeing how you conduct your personal finances usually by reviewing your bank statements.
Reasons for a Low Credit Score
A string of late payments from up to seven years ago can bring your credit score down, but there are other surprising ways you may not know of that can give you a bad credit rating. If you’ve never taken out a loan or you don’t use a credit card, you can end up with a low credit score as you don’t have a history of being able to borrow and repay money. Whether your bad credit score is from declaring bankruptcy, a divorce, or low income, it doesn’t matter as lenders will examine your unique situation when you approach them for used car auto loans.
Ensure Your Credit Score is Accurate
The first thing you need to do is assess your financial situation by ordering a free copy of your credit report from Equifax Canada or TransUnion Canada. Review this information and formally request that any mistakes be corrected. Taking this simple step can result in better used car auto loans as you will have a complete understanding of your finances and better control of the deal you make with a lender.
Before you take out any used car auto loan, be sure you can meet the obligations of the loan as the last thing you want is to reduce your credit score even further. There are honest and unscrupulous dealers so don’t be afraid to ask all your questions and thoroughly understand the process and payments before you make a decision.
Financing Your Used Car
Credit unions offer a more relaxed approach to used car auto loans than most financial institutions. Credit unions are more likely to give loans to people with a low credit score, and the longer you are a member, the easier it will be to get the loan.
Another option is to use your checking and savings bank because it will be more lenient if you’ve already taken a loan and payed it back once before. If you can provide a co-signer who has a good credit score, it will also be easier for you to get a loan from your local bank.
Often car dealers are affiliated with lenders and there are a number of benefits of financing your used car through a used car dealership as it may offer options for people with bad credit scores. Sometimes, interest rates can be better than what your bank offers. However, be wary of a deal that sounds too good to be true because it may contain hidden costs.
Your Individual Situation
Although there are many online lenders that promise low interest rates, whenever possible, it is always best to shop around and personally meet with the lender. Advertised used car auto loans rates may be adjusted when you meet the lender in person and they assess your specific situation. Even if the difference is small, there may be long term benefits for your finances. You are off to a good start by following websites like Automotive Finance News.