A lot of car dealership have advertisements for people who have poor or no credit. This means that it is certainly possible for people in that situation to get approved for a new car loan. However, you do have to make sure that you exert due diligence, so that you get an affordable deal. Below are some of the things to look for.
1. Know Your Score
First and foremost, you should request a free copy of your credit report so that you know what your current score actually is. You can also use this to find out whether there are any errors on your file. If there are, make sure they get fixed before you apply for any loan.
2. Save Up
One way to get a really good deal, regardless of your credit history, is to save up for a sizeable down payment. The more you can put down, the less you need to borrow, and the less risk a lender takes on you. This is particularly true for new cars, which depreciate as soon as they are purchased. Try to make sure that you have at least 10% to put down on the vehicle to get a really good deal.
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3. Can Someone Co-Sign?
If you have really bad credit, but you desperately want that brand new car, then you could consider asking someone to co-sign the agreement with you. This means that, should you not pay the loan back, they will be held liable for it. It has to be someone you really trust, therefore, and who really trusts you, and you should not break that trust.
4. Shop Around
You are under no obligation to actually accept the loan that the dealer is suggesting to you. Even if you buy straight from a manufacturer, there are lenders who are happy to work with you. Hence, make sure you shop around so that you can find the best possible deal.
5. Get a Calculator
Loan representatives are trained to make their offers sound fantastic and affordable. However, whenever you borrow money, you always pay back a whole lot more than what you actually borrowed in the first place, sometimes two or three times as much. Hence, do the math and make sure that you calculate exactly what you will have paid for the car once it is paid off.
6. Establish Good Faith
If you have bad credit because of past problems or bad decisions, it doesn’t mean that you are still that same person. Bring statements from your bank and your utility bills, for instance, to demonstrate that you do actually pay your bills on time. Lenders will consider you on a personal level.
There are many loan options out there for you, and you need to make sure that you choose the one that is most financially viable for your personal situation. Do your research and don’t be tempted to jump at the first good thing you come across.