How To Finance A Car With Bad Credit
Knowing how to finance a car with bad credit can help you start to improve your credit rating. There are many sources online that make loans for people with bad credit. Many auto dealers have a loan program for bad credit car buyers. You can also use a co-signer to finance a car with bad credit, which can help you get a lower interest rate. Weigh all of your approvals, and then choose the lender that has the lowest interest rate. Make the monthly car loan payments on time so your credit score will start to improve.
- Tell the auto dealer you need to finance a car with bad credit. You will have to complete a credit application, which the dealer will submit to the lender they use for financing. The lender may issue you an approval, but they may require a substantial down payment to finance a car with bad credit. This is due to your credit rating, and the lender needs to be comfortable with the amount of risk on the loan.
- Before you accept the dealer’s loan, check other sources. Look online for lenders that finance a car with bad credit. Fill out an online application and submit it for review. If you get an approval, compare the interest rate and down payment requirement to the dealer’s offer. Pick the one that has the best terms.
- You can also ask a co-signer to help you. Tell a relative you need to finance a car with bad credit, and see if they are willing to sign on the loan. Have them apply with the dealer, then find out what interest rate the loan approval carries. You can also complete an application at your local bank, to see if they will give you a lower interest rate using a co-signer.
- Compare all of your approvals. Decide which loan source to use, and set up a time to close on the loan. Remember to cancel your applications at the other lending sources.