Introduction
When you have bad credit, car loans don't even seem like they are possible, and if they are then you can clearly expect a higher interest rate and a lower loan amount. There are a few things you can do to save you a little bit of money when getting car loans with bad credit so don't lose hope thinking you are doomed because of life circumstances that put you in this position. It may be a bit more challenging but not impossible. Here are a few do's and dont's when it comes to car loans and bad credit.
History
When some one has bad credit but needs a car, car loans are usually a must because most people do not have that kind of cash sitting around. Buy here, pay here are the most common places that people turn to when they have bad credit and need car loans. The best advice you can get and take is to avoid those place like the plague. They have ridiculously high interest rates, high monthly payments for their car loans, and most of the vehicles are high mileage abused cars. They are not a long term solution and it will put you in a bad place financially. So learn from your past financial mistakes and do not even consider a buy here pay here for car loans. This will do nothing to help your bad credit.
Features
When you have bad credit, you can try to get financed through your bank or credit union for your car loans. Credit Unions more often than not will work with your personal situation and not just your credit score. You can explain why you have bad credit. Maybe you lost your job or a close relative got sick and you had to care for them. Maybe you were young and just made poor choices. You may still get a high interest rate but it won't be nearly as high as the dealerships financing interest rate. Show the credit union that you now have a good job, that you can provide a down payment, and that you just need another chance to get back on your feet. We all have to start some where.
Tips and Comments
Shop around for a vehicle with lower mileage, so don't limit your search to just the area that you live in.
Save up a little money for a down payment.
Try to keep good job history to reassure the bank that your income is stable.
Get financed through your bank or credit union, not the dealership.
Do not go to Buy Here, Pay Here!
Do not jump into the first "deal" you are given.
Remember how you got bad credit to begin with. Learn from your mistake and take your time when searching for a car. Anyone can give you loans but you want to put yourself in a better position so don't rush into just any deal. If you think you found the car, sleep on it and really think about it. Do not make an "on the spot" decision when you have the dealer standing in front of you pressuring. If you need to, you can even get counsel from someone you know is financially sound, get their opinion. You will be happy knowing that you did all you could do to make the best financial choice.
