How to Shop For Poor-Credit Car Loans

Get the car you need with a poor-credit car loan.

If you're buying a car with bad credit, you still have a good chance to get the car you want through a poor-credit car loan. Subprime lenders specialize in providing poor-credit car loans for people with bad credit. These loans usually carry a higher interest rate, due to the greater risk involved for the lender. If you're responsible and make all your monthly payments on time, a poor-credit car loan can help rebuild credit and improve your score. Before you apply for a poor-credit car loan, you should understand how to go about shopping for one.

Things You'll Need

• Down payment
• Credit report
• Co-signer
• Private loan financing

Instructions

Shopping for poor-credit car loans

1. 

   Improve your credit before applying for a poor-credit car loan.

   If possible, pay off debt and clear up any financial issues before you begin shopping for a poor-credit car loan. Buying a car with bad credit usually results in a higher interest rate for the loan, so improving your credit score helps your chances of getting a poor- credit car loan at a lower rate.

2. 

   Calculate the poor-credit car loan amount needed

   Find the vehicle you want to finance and calculate the amount you'll need to borrow for your poor-credit car loan. Deduct any trade-in value from the poor-credit car loan amount. Analyze your income and monthly expenses to make sure you can afford to pay the poor-credit car loan's monthly payment.

3. 

   Make a down payment for a poor credit auto loan.

   Determine if you can afford to make a down payment. A down payment significantly lowers monthly payments, and if you have a bad credit score, you'll have more power to negotiate a lower interest rate.

4. 

   Use your credit report when applying for poor-credit car loans.

   Apply for a copy of your credit report online. Use your credit report when shopping for poor-credit auto loans at dealerships, or online. In the event that a dealer runs a credit check and you disagree with the results, you can use your own credit report copy for proof and receive the lowest possible interest rate for your loan.

5. 

   Compare poor credit car loans online.

   Compare multiple quotes online for poor-credit car loans. Compare loan rates from subprime lenders. Subprime lenders usually have higher interest rates, so you'll need to shop around for the best deal.

6. 

   Apply for poor credit car loans.

   After comparing several loans online, apply for one or more. If your first selection does not get approved, the additional applications might be approved. Application results for online poor-credit car loans usually takes one to two hours.

7. 

   Find a co-signer for your poor-credit auto loan.

   Try and find a co-signer for your poor-credit car loan. Having a co-signer reduces the risk for the lender, which means you'll have more power to work out a better deal and receive a lower rate. Ask close friends and family members if they would be willing to co-sign.

8. 

   Shop for the best financing options.

   Find private loan financing outside of your poor-credit auto loan dealer. When buying a car with bad credit online, you'll receive a lower interest rate by securing the loan though a private subprime auto broker. You can find private financing options by searching for auto brokers online.

Tips & Warnings

• Shop online to find the best deals for poor-credit car loans. The heavy competition online means dealers are fighting for your business, and you can often find a better deal than you would shopping in person.

• Shop online for poor-credit car loans so you can quickly compare multiple quotes in a short period of time. Loan approval online takes only one to two hours.

• Review a lender before taking out a poor-credit auto loan. Conduct research by checking the Better Business Bureau website for any complaints filed against the business.

References

• Tips for poor credit car loans
• Poor credit auto loan