Auto Loans With A Bad Credit History Is It Possible
Yes, it's possible to get approved for an auto loan even if you have bad credit. Why? Because auto loans are guaranteed by the car you want to purchase, they are easier to get approved for than other types of loans. Below are some tips to follow if you have bad credit and want to get an auto loan.
Play Low and Ask for Less
Your chances of being approved for an auto loan while having bad credit improve significantly if you ask for less than the car is worth. That's because the lenders want a guarantee they'll get their money back even if you don't pay your loan. They want to make sure they can resell that car for a profit. Don't ask for the full sum of money. Instead make a down payment. That's the difference between car value and loan amount. This will decrease the risk of the lender and will improve your chances of being approved.
Use the Internet to Inform Yourself
Use the Internet to search for the lowest rates. This is the first thing to do, actually. Inform yourself on the loan rates different lenders are offering. If you're going directly to dealerships they will tell you that you can't get a better rate because of your bad credit. Search the Internet and you'll discover this is not always the case and that you can get a lower interest rate even with a bad credit history. Inform yourself then go to auto dealers. You can even get preapproved online, which will give you a stronger negotiating position when you do go to auto dealers. If an auto salesman knows you already have financing, they will take you more seriously and probably offer you better deals.
Repair Your Bad Credit History
If you have a bad payment history, this will have a negative impact on your chances of getting approved for an auto loan. But hey, this is history, right? If your have other credit accounts, be sure to make all your payments on time, at least 3 to 6 months prior to your auto loan request. This way you will prove your bad payment history is a thing of the past and your chances of being approved for an auto loan will significantly increase.
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