Having a car is a necessity in today’s modern world. It makes your day to day life more accessible, convenient and fast. Unfortunately, bad credit can make it hard to purchase a new car. With the economy on the rocks, auto dealerships are far more cautious when it comes to choosing the right candidate for their products. Luckily, there are always options that can help get you into that car of your dreams. Bank loans, credit unions, and online financing are always available, but before you make any moves make sure you are aware of your different options to find the most affordable and suitable loan for YOU!
Before anything, you should verify your credit score and, if necessary, make any corrections on it. Bankers and lenders are very aware of your credit rating and if things aren’t up-to-date, you might lose out on better financial opportunities when it comes to your loan.
The safest and most expedient way to get a car loan would be through a bank. However, most banks do not feel safe giving out large sums of money when bad credit is an issue because there is a high risk. Most banks will either only cover a portion of the loan you need, or will decline you altogether. If you do chose to use a bank, make sure to let them know what type of loan you want; how much you want to pay, at what interest rate, etc. If they seem a bit skeptical, then that bank is probably not the right one for you.
Don’t panic though! There are always other options. Online credit unions or financing companies are more available and flexible. They are accessible to almost anyone and often offer lower interest rates than banks! Make sure you are cautious when shopping online because some website could end up being fraudulent and cost you thousands of dollars in unwanted debt. ALWAYS read the fine print!
Shop around! Car loan rates and terms vary from lender to lender and you may end up finding something that suits your needs a bit more. Ask about hidden fees and early payoff calculations. Also, shopping around at different car dealers may save you some money on the car you want!
There are two types of loans available; one is a loan with a fixed interest rate and the other is a loan with a variable interest rate. A fixed interest rate offers an interest rate that does not change thorough the life of your loan. This can be more convenient and safe. However, make sure to read the fine print for any hidden fees. A variable interest rate is an interest rate that fluctuates over the course of your loan. These loans are better when you are able to fluctuate in your payments in order to pay the loan of faster. There is usually a range in how much they can charge you. Often you may be able to make your own fluctuating payment plan, or the lender will decide this for you! Whatever the case may be, make sure you are comfortable with it!
When you are ready to make a move, make sure you know what you want and who you are dealing with. Have all the facts available when signing up for the loan and be prepared to make a budget! Most of all don’t settle for a car you don’t want just because of the deal, you should be fully content with your decision! Don’t be afraid to be assertive with the lenders and the car dealers alike, after all, you are the customer!