If you want to get a new car but have bad credit, it is important that you know what your options are like. There are numerous ways to get around your less-than-perfect credit rating, and the more you know the better off you will be. While some people believe that financing a car with bad credit is next to impossible, the truth is that there actually many ways to do so if you get creative. These tips will enable you to get the car you want without having to be held back by poor credit.
Do What You Can to Improve Your Credit
You should spend some time improving your credit before you apply for a car loan. The more time you set aside for doing this, the better your chances will be of getting the money you need. Your credit score will affect the interest rate you get on your loan, so you will therefore need to beef up it up as much as possible. Waiting a little bit to get your loan in favour of improving your credit can save you a ton of money in the end.
Do Not Apply for Any Other Lines of Credit
As you prepare to apply for a car loan it is important that you do not take advantage of any other lines of credit. You will be hard pressed to find a lender who will go anywhere near you as long as you have current debt to pay off. You should also stay current with your rent or mortgage so that you won’t need to worry about getting turned down. The more reliable you seem on paper to a lender, the better your chances will be of getting your car loan application approved.
Look at the Current Interest Rates
Another important thing to do before getting a car loan is to check what the current interest rates are like. If you don’t want to pay more for your car loan than necessary, you will definitely want to do this. When you know what the average rates are like for these loans, you can avoid getting ripped off by an unscrupulous lender.
Make the Biggest Down Payment You Can
A bigger down payment means less interest, so you will want to keep this in mind. Those who pay 20% upfront on their loans usually get a great interest rate. The less you put down on your loan, the more you will end up spending in the long term. It can be tempting to only spend a little bit up front, but it’s only going to hurt you in the end. A bigger down payment is always better when it comes to getting a good deal on a car loan.
You will have a much easier time shopping around for a good deal on a car loan if you get pre-approved. Go to Emu.co.uk and tell them you are interested in buying a car but need financing. They will take you through the pre-approval process so that you will get a better idea as to what you will be able to afford. This will narrow down your list of options so that you can find the right car without having to spend more time than necessary doing research.
Forego All the Extras
A lot of people get caught up in the extras when buying a new car, such as a top notch speaker system and sun roof. If you are attempting to get a car with bad credit, the last thing you want to do is to tack on more money. You should only get what you can realistically afford, because otherwise you are just taking a big and ultimately unnecessary risk.
Choose a Reputable Lender
The lender you choose will be responsible for setting your interest rate and the terms of the loan as a whole, so it stands to reason that you’d want to choose the right one. There are many different lenders that you will be able to get financing from, but you don’t want to borrow from just any of them. You should try to avoid going through the dealership directly for financing, as you will most likely get a very high interest rate.
Read the Fine Print
Take the time to read the entire loan contract you are given, because otherwise you will most likely end up regretting it. There are going to be a lot of things for you to review, and you should never be afraid to ask any questions if you are confused about something. The lender should lay out everything in a clear and straightforward way so that you understand everything that is expected of you. The contract you sign will have everything from the due date of the loan to the full amount and interest rate.
The more time you spend shopping around for a good deal on a loan, the less you will end up spending by the end of the term. Get quotes online for car loans so that you can get at least a rough idea as to how much each one will cost you. After you have gone through the pre-approval process, all of this should be fairly easy to calculate. You definitely do not want to rush into getting a loan before you have taken the time to do this.
Stay Positive but Realistic
You should try to maintain a positive attitude about getting financing for a new car, but you also want to be realistic. The fact is that you probably won’t get the kind of rate that someone with good credit can get, but that doesn’t mean you cannot save yourself some money. Those who are dedicated to finding a good deal on a car loan will be able to get it. It’s also important that you spend as much time as necessary doing what you can to improve your credit before applying for one of these loans.