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.