Interest rates for used cars and borrowers with bad credit are normally higher than the rates offered for new cars and ideal credit. If you have a bad credit and are planning to buy a pre-owned vehicle, you can expect to get a high interest rate. This does not mean though that you will suffer having to pay up a burdensome auto loan. You don’t have to. Here’s some information on how you can find the best used car loan rate for bad-credit borrowers like you.
Are you part of a credit union? If so, head there first to get your used auto loan. Credit unions are formed by and for its members. This means that they don’t render their services for the sake of profit. They exist and operate to lend a hand to their members. The good news here is they don’t charge hefty rates. You can expect their used car rates to be extra lower than the rates offered in banks and by other lenders. Moreover, credit unions can look past your credit. You can still get a good rate for a used car even if your credit rating isn’t that impressive.
The low rates in credit unions are exclusive to their members. If you’re not part of one, you should go and check out other options for a used auto loan. The next option in your list should be banks. Don’t get intimidated by banks. Their credit standards aren’t that strict anymore. They are also leaning towards potential borrowers who are in the subprime tier. So go ahead and try your luck. Your credit score might qualify for a good used car rate in a bank.
Online lenders today are almost like the stars in the sky. They aren’t really hard to find in the worldwide web. You can find plenty of them. Plus, there are companies who are willing to find lenders for you and even find out whether you are qualified. Look for these companies online. They offer convenience. All you have to do is fill out the application form provided in their website and submit it. They will forward to it to several lenders in their network. In less than a day or two, you would already receive the information about the lender and used auto loan deal you are qualified for.
Making Sure You Get the Best Rate
As you find the perfect lender for a used auto loan, make sure that you are indeed getting a good pre-owned car deal. Here are some things to remember:
• Inspection. Never skip this part when buying a used vehicle. Used vehicles are never good unless they pass the inspection. This is the process where your mechanic and you find out whether the car is still in a good condition. Hire a professional and trustworthy mechanic to perform the inspection. You can also do basic inspection yourself.
• History report and recalls. Do not forget to request a copy of the vehicle’s history report. This is where you can learn about the vehicle’s past in terms of ownership, repairs, maintenance and performance. Find out also whether the vehicle has open safety recalls. Believe it or not, neither you nor the seller knows about a used car’s recalls until one of you looks them up.
• Shop around. Whether you’re buying new or used, shopping around for the best financing rate is necessary. Remember to look at at least 3 lenders and compare their rates. Auto loan calculators are also great tools that let you see the big picture of the costs involved.