Consumers with bad credit normally worry a lot about buying a car and getting approved for financing. As an auto loan provider, we don’t want you to go through the process of obtaining a car loan with fear and anxiety. Here are some tips that we hope will not just help but also encourage you.
It’s not a dead end.
A very low credit score should not be the sole reason for you to lose all hope about getting approved for a car loan. Lenders look at other factors like income stability and your bad credit story when making lending decisions.
Unscrupulous lenders can also lie about your credit score, making it a lot worse, if you let them get it for you. To avoid this credit score lie scam, get your score before stepping into any lending office.
You can get better credit with a car loan.
Not many car buyers realize this but getting a car loan is actually a smart move to improve your credit. But the ultimate result will come only if you consistently make your payments on time. On the flip side, bad credit car loans can indeed damage your credit more if you miss payments. To avoid this, make sure you are financially and mentally prepared for an auto loan commitment before applying.
A lot of lenders are willing to take you in.
Believe it or not, many lenders today have shifted to the subprime market. They are now focusing their effort, attention and finances on people with less-than-ideal credit. And this means you can certainly find an auto loan out there. But you need to be extra careful because abusive lenders are lurking around to take advantage of auto loan seekers with problematic credit. In any case, shop around for the lowest possible rate.
You don’t have to travel the world for the best rate.
You think shopping around is inconvenient and requires travelling great distances? No. You can find the best deal right in your city. Yes, right here in St. Louis. As we have mentioned, a lot of lenders are now willing to take subprime borrowers into their auto loan programs. That means you can find several options in St. Louis or Missouri without having to look for other options in Oklahoma or Illinois or in any nearby state.
Don’t get too shiny objects.
We’re actually talking about long loan terms. For a few years now, extended loan terms are a trend. This is because people don’t have a lot of money to purchase a new car and auto loans like 72 months and above come with low monthly payments, which make a car appear more affordable. Now people swoop on these offers thinking that they are cheap finds. But are they really cheap?
Extending the loan term only gives you more interest to pay, making the overall cost of the loan bigger than what it could be in a shorter period. We say keep the loan term short to avoid overpaying and to actually save money on your auto loan.