FINDING THE BEST SUBPRIME AUTO LOANS
People with bad credit are often gripped with panic the moment they realize they need a car ASAP. Their main concern is they might not be able to qualify for an auto loan, which they see as the only way to buy a car.
But by just having the right attitude in approaching the situation and the auto loan approval process, finding the best subprime auto loan isn’t far from possible.
1) Be ready to give up your dream car for now.
If you’re like many car buyers, you’re probably eyeing for a nice car to purchase despite your credit situation. However, experts suggest going for a cheaper car when you have a bad credit.
At this point, you would want to first work on acquiring a better credit and save as much cash as you can rather than settling for an expensive car. Consider buying a used car especially if you have low income.
Don’t worry. You can someday drive the car of your dreams worry-free when you have better credit.
2) Don’t assume your credit is too poor.
Just because you have bad credit doesn’t mean you’ll never get financing for your car. Experts say there’s really no “benchmark score” with which lenders would automatically reject a credit application.
It’s possible that you are denied an auto loan and a borrower with a lower credit score gets approved. However, experts point out that the lower your score, the more you pay for a car loan.
If the car purchase isn’t that urgent, you can perhaps spend some time improving your credit first before pursuing an application.
3) Find the best auto loan deal diligently.
The interest rates of auto loans for people with bad credit may be high, but finding a great deal is still possible despite your credit situation. Just shop around diligently.
Research well about affordable and efficient car models, bad credit auto financing options and current interest rates. Also, compare different interest rates from various auto lenders by using an auto loan calculator which is available online.
Shopping around may be time-consuming (that’s why some car buyers don’t like the idea) but it is an effective way to find the best deal available in the market.
4) Be vigilant.
Abusive lenders in the industry usually prey on the ignorance and desperation of people with bad credit. When you shop for auto loans, make sure your guard’s up. Be wary of too nice and too attractive deals. Never sign the loan contract without going over the paperwork first. Don’t forget to read the small print. Get familiar with the various schemes that abusive and unscrupulous auto lenders pull off and know how to avoid them.
5) Don’t be in a rush.
You may need a car loan now even if you still have damaged credit. But don’t make decisions hastily. Take every step seriously so that you make only informed decisions.
Believe it or not, there are some borrowers whose credits got worse just because they rushed into a subprime auto loan which eventually turned out to be detrimental to their finances.
If you are planning on buying a new car, plan ahead and start moving as early as now. Here are a few things you could do to prepare for a car purchase regardless of your credit:
- Check your credit status. Are you doing well with your payments? Does your credit score qualify for a low interest rate? If your credit is in bad shape, you can start working on it now.
- Save money for the down payment. Car buyers are often surprised by the size of down payment required by bad credit auto lenders. A down payment is never cheap. But you can prepare for it beforehand by saving up ahead.
- Do your homework. Equip yourself with some knowledge on subprime auto financing, auto loan application process, credit report and car financing scams, among others.