There are a lot of times that we can’t help but have bad credit scores. Things such as losing your job or having emergency trips to the hospital can affect your overall credit score and make it hard for you to be able to buy a car. Thankfully, there are a lot of other ways you can be qualified to get a car despite your credit score.
A popular method that people enjoy is to get bad credit car loans. However, how much do you know about car loans and how would your credit score affect how quickly you can get a car loan? Today, we will teach you everything that you need to know about car loans and how to get a car despite your bad credit history.
What’s a Car Loan and What’s the Difference Between a Loan and a Lease?
A car loan is where you borrow money from a place such as a bank or an auto dealer. The money that you acquire will allow you to buy the car and own it; additionally, you will have to repay the lender throughout a period until your loan is paid in full.
It is important to remember credit history and your financial status can affect what kind of deal you can get with a lender.
On the other hand, a car lease is where you lease a car for a fixed amount of money over a period. Keep in mind that a car lease only allows you to have the car for a while and you will have to return it once your contract is up, whereas a car loan will enable you to own the vehicle.
What’s the First Thing That I Should Do to Get a Car Loan?
If you have a less than fantastic credit score, then you will have to do some things to make your credit score look better.
You also need to be able to prepare yourself to be able to pay off the car loan if you get approved for it. One of the first things that you ought to do before you apply for a car loan is to pay off any debt that you have.
This may not always ensure that your poor credit score will improve, but it auto lenders would prefer lending to people who don’t have debt.
Along with that, be sure that you don’t make any other large purchases that would become a long-term payment to avoid any more liabilities.
Additionally, you can try to make timely monthly payments to your other bills as much as possible. Again, this does not ensure that it will raise your credit score, but it will keep it from getting lower.
Late payments make your credit score lower, which is precisely what you want to avoid.
If a lender takes a look at your credit reports, be aware that that’s not the only thing that they will look at when you apply for a loan.
You might be surprised because these things will not be in your FICO report, but they will still be checking out. Some of the other aspects that a lender will look at is your history with jobs (i.e., your stability with careers, how often you get a new one, etc.), your current income, etc.
They will also take what kind of loan you are applying for into consideration before they make a choice.
Knowing that, making sure that you had a stable history with jobs and are currently stable with the one that you have now could heighten your chances of getting a car loan.
If it is possible, try to put more effort into your job to see if you can get a raise. Your income could come to your advantage when applying for a car loan.
Lastly, be sure that you are applying for a car that is within your financial means or an extremely inexpensive car.
Auto financing lenders will be more likely to lend you money to buy a car if they see that you chose a vehicle that is affordable and you have a good income.
By focusing on these aspects, you can potentially outshine your lousy credit score.
Always Choose Short-term Payments.
It may be tempting to choose long-time payments because you will pay less throughout the years.
However, the longer ones often have higher interest rates compared to the shorter ones, which can make you lose more money in the long run.
Be sure to choose a shorter term payment method to avoid paying more than what you have to.
If you want to get a car with bad credit but leasing a car doesn’t seem appealing to you, you can try to get bad credit car loans. You have to be aware of the factors that each car loan can offer and try your best to improve your chances of getting approved for a car loan.
Once you have followed the advice above, you can confidently go to an auto lender to be able to get your very own vehicle.