4 Ways to Get Approved for Auto Loans When You Have Poor Credit3 min read
Having a low credit score shouldn’t keep you from driving the car of your dreams. In fact, auto loans are available to people who have a less than stellar credit scores, so don’t let your own numbers stop you. You can obtain the financing you need wanted by using these four tips.
1) Have a Large Down Payment
Financing companies and lenders are more likely to make a payment plan with you if a considerable amount of money is placed down on your advance. Try to save 10-20% of the money you need to pay off the car. You can do this by making a budget plan where you set aside a certain percentage of your income every month. The more money you can put down as a good faith payment for your financing, the better your chances are of getting an auto loan you can use to buy a great automobile.
2) Consider a Co-signer
Do you know someone who has a terrific credit score who may be willing to co-sign auto loans with you? If so, this can increase your chances of getting great financing with lower rates. A co-signer is a person who joins your loan with you, and they take on the responsibility of your payments if you fail to follow through. Often, family members or even your spouse are likely to volunteer to help you in this manner. It’s important that you choose a co-signer who has a credit rating of 700 or better in order to offset your lower score in the eyes of lenders.
3) Show Proof of Credit Responsibility
Perhaps the best way to get auto loans is to prove that you can repay borrowed money. The way you should do this is simple-begin paying off credit cards and other types of advances, starting with the ones you can pay off sooner. You want to be able to show at least six months of reliable and timely payments on everything from credit cards to medical expenses. When you apply for assistance on your car purchase, your lender will look at your credit report and will notice any delinquencies, charge offs, and late payments right away. The less debt you can show on a report, the more likely you’ll be able to get auto loans no matter your score.
4) Bank Where You Want to Get Financing
Choose a banking institution that you would like to get automobile financing from and open a simple checking or savings account that you use a few times a month. This is a great way for you to show good faith that you are able to pay a loan back. Banks and their lending offices are more likely to offer money to customers who use their services already than people who are considered strangers with no reliable history of responsible banking.
Getting a loan to buy an automobile is a great way to build credit and give you more freedom. Use these great tips to get the financing you need and buy a reliable car that you will love.