How to Get Car Financing With a Poor Credit Rating
Car shopping for a person with a poor credit rating can be frustrating. Financing a car when you have bad credit is not impossible, but it will take some work on your part. Having a low credit score will not keep you from being financed; it just means that you will have to work a little harder. Options are available that can help you get car financing with poor credit.
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Instructions
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Take out a home equity loan. If you own your home, it may be easier to obtain a loan on your equity to buy a car. The interest rates are lower on this type of loan and you already have the collateral. Be wise and only take out a loan for the amount needed.
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Apply for a personal loan or line of credit. If you have had your account for a while and have had no overdrafts within a 12-month period, you may qualify for a loan. You may qualify for a smaller loan than expected because of your credit situation, but it is still better than nothing. The interest rates on these types of loans are lower than the rates charged by dealerships with in-house financing.
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Apply for online auto financing. These companies specialize in locating lenders for applicants with poor credit. Be careful when giving out personal information online; it may be required for the application, but check to see that it is a secure site. Look for a lock symbol in the lower right hand corner or https in the browser window. This tells you the site is secure.
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Check out local car dealerships that advertise bad credit car loans. This is a last resort if all else fails. Get a copy of your credit report and print it out. Take this with you to the dealerships. It will save unnecessary inquiries on your credit. Be prepared to put down a larger down payment and have higher monthly payments.
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Tips & Warnings
Educate yourself about interest rates on cars in your state. Rates will vary by lending institutions and dealerships may charge more than other types of lenders.
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