6 Tips to Get a Car Loan with Poor Credit

I actually have no credit in America. (It's something I'm working on.) So if I'd wanted to get myself a car but didn't have the cash, I would probably have difficulty getting a loan. Fortunately, here's some tips from reader Jim on how to manage if you're in such a situation.

Driving your own car is by far one of the most convenient modes of transportation. However, getting a car loan with a poor credit standing may prove to be a challenging feat. Nevertheless, here are some tips to help you get your dream car, even with a poor credit.

Research about different auto lenders

There are a wide variety of auto lenders and some specifically cater to assist people with poor credit. There are also car dealerships that may have agreements with lenders that work with subprime borrowers. The main downside, however, is that these lenders usually offer loans with a higher interest rate. Thereby, take some time to research and evaluate different auto lenders to help you get a car loan with Creditspring even with a poor credit score.

Save up enough money for a down payment

A relatively large sum of down payment will make your monthly amortizations significantly lower. If you have a bad credit score, it is best to save up for your car’s down payment before applying to take out a loan to pay the balance. The loan you may need to apply for will definitely have a lower interest rate or a shorter term, which will work to your advantage.

Ask a friend to be a co-signer

Having a co-signer with a good credit standing can increase your chances of getting approved for a car loan. A co-signer acts as a guarantor for your loan to ensure that the debt is settled. Thus, ask for the help of your friends with a good credit standing, but ensure that you are diligent in paying your monthly dues.

Consider a title loan

A title loan is usually a short-term loan in which the collateral used for the loan is the car itself. One of the providers of auto title loans Riverside and other California residents recommend within their state, have an online site that will instantly provide you with an overview of how much your car qualifies for. In contrast to the auto lenders, catering to subprime borrowers, a title loan will pave the way for lower interest rates without having to pay extra payments or penalties, as long as the dues are diligently settled.

Try a buy-here-pay-here dealer

A buy-here-pay-here dealer simply means that the car you chose from a certain dealer is financed by that dealer as well. With this scenario, the need for a third party agent is eliminated because your loan approval is dependent on the same entity that is making the car sale.

Check a credit union

Consider financing your car with a credit union who are also known to work with people who have a poor credit score. More often than not, loans taken out from a credit union are offered in good terms with generally lower interest rates. Check whether there is already a credit union associated with your employer to give you a head start on where to go looking.

Securing a car loan may prove to be challenging, especially with a poor credit standing. Nonetheless, there are certain work around solutions that may still help you get your dream car.

Penniless Parenting

Mommy, wife, writer, baker, chef, crafter, sewer, teacher, babysitter, cleaning lady, penny pincher, frugal gal

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