Many people these days dream of getting a new car but are afraid that their poor credit rating will stop them from achieving this goal. However, today there are many ways for people with bad credit to obtain a car loan. However, there are certain things that you should be aware of so that you don’t end up with skyrocketing interest rates. This article will provide you with the information to make the correct choice in getting your car loan.
It is not recommended that you take a loan from the car dealer. Do not fall for statements such as “get your car and financing from one place”. Did you know that many car dealerships increase the car loan rates on the loan so that the difference between the original interest rate and the inflated one becomes their profit? The truth is that most car dealers mark up the interest rate just as they do with the car prices. Go directly to lender and you will save yourself a bundle.
You can borrow against the security of your house or any other valuable collateral that you may own. There are both advantages and disadvantages of choosing this route. The advantage is that you can get the loan with a relatively low interest rate. The disadvantage is that if for any reason you cannot make your loan payments on time you will put your security in danger and may end up losing it. Thus, be through with your financial calculation to ensure that you are able to meet all loan payments and car maintenance payments before putting your security on the line.
Check with various credit unions and banks to see if you can borrow without any collateral. There are various banks and credit unions that specialize in providing auto loans even if you have bad credit. Almost all institutions that provide loans without a security would require that you have been employed for a year or more and have been living at the same location for at least a year.
If you are unable to secure a loan from the bank, then you can turn to bad credit car loan lenders. There are many lenders that provide this service. Search online for bad credit loans for cars and you will see tones of lenders. You can search various websites such as this one that specialize in matching you with a car loan lender based on your credit history. You can benefit significantly by doing this search and comparing car loan rates to ensure that you find good auto loan rates.
If you have some time and for the future you need to know your credit score and be aware of your credit report. As you may already know there are three agencies, TransUnion, Experian, and Equifax that record your credit information and your credit score. Getting your credit score is easy these days as there are number of websites that points you to where you can get your credit score from all there agencies for free. You should definitely take advantage of this opportunity to find out your credit score. Knowing your credit score is just a start but it is not sufficient in itself; you also need to obtain your full credit report from all three credit bureaus. You should then check your credit report for errors and report any inaccurate information immediately. It is reported that many derogatory information on your credit report is inaccurate information or expired information. You will greatly benefit by reporting these to the bureau which will increase your score in time.