You Can Still Get a Car Loan If You Have Bad Credit

So, you might have made a few mistakes in the past that have resulted in a blemished credit history, causing you to think that all hope is lost when it comes to obtaining a car loan. Today, possessing bad credit does not automatically eliminate your chances for getting a car loan. Even people who have claimed bankruptcy in the past have been able to obtain car loans. More and more people in the United States have less-than-perfect credit and if you happen to be one of them, there are options for you to consider.

Since the rise in people who have poor marks on their credit history has become an increasingly common trend, this has shifted the way that car loans are doled out. Credit unions, finance companies, as well as banks have altered their policies and procedures to accommodate this noticeable factor. People who didn’t have a chance in being granted a car loan five years ago now benefit from improved car loan qualifications. This widespread leniency in car loan acceptance has made it possible for people to obtain a rather important necessity in life.

What’s the Catch?

When you are trying to obtain a bad credit car loan, the type of payments and rates you will receive depend on how badly your credit has been affected in the past. Before paying a visit to the dealership, it is wise to have your affairs in order and decide how much effort you want to put into the process of qualifying for a car loan. In today’s car sale industry, dealerships will do just about anything to entice customers with a “deal” or car loan approval. They don’t care how damaged a credit history is, they will still work with you to make sure you drive away from the lot with a car. Receiving a car in this manner does come with a catch. You will not be able to enjoy the best rate possible if you have bad credit. The overall terms of your car loan will also have a few stipulations that someone with good credit does not have to deal with.

How to Soften the Blow

One way to buffer some of these minor disadvantages is to be proactive in your choice of car loan approaches. Keep in mind that the interest rates regarding a loan received through a dealer will be more than those directly acquired through a bank. This is because when a dealer facilitates a car loan through a bank, rates are increased because they expect a piece of the pie as well. Cut out the dealer’s role and go straight to the lender and you will save money. Although, interest rates for loans received by those with bad credit are about 10-20% higher, good deals can still be obtained through shopping around. Once you obtain a car loan, maintain a clean record of payments and you will be well on your way to repairing your credit.

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