How to Finance Your Vehicle Purchase if You Have Bad Credit

 

How to Finance Your Vehicle Purchase if You Have Bad Credit?

Having bad credit can feel incredibly restrictive and like it precludes you from doing things like financing a new vehicle. Luckily, there are options for people with bad credit, such as lenders with competitive rates. There are also things you can do so getting a loan is easier for yourself, preparing you to go forward with your loan.

How to Finance Your Vehicle Purchase if You Have Bad Credit

5 Steps to Take Before Applying for Car Loans to Get Approved

1. Check Your Credit Score

Checking your credit score first is crucial because mistakes happen, and you need to know what you're dealing with. For example, if there are errors in your credit history, you may need time to fix those errors. Likewise, if there are late payments, you can take extra time to catch up on them, improving your score and lowering loan costs.

2. Assess Income and Debt

This is a step a lender will take as well, and doing it yourself will put you in a better position of power to negotiate and expect what kind of rates they'll give you. It's also a great step to ensure you can afford the car you're buying.

 

Total your monthly debt against your monthly income to have an idea of how much money you can afford to make payments with per month.

3. Prove Personal Stability

A lender isn't only lending to your bank account- they're lending to you as a person, and they want certain assurance that this person they're lending to will be responsible enough to pay them back. Things they look at to see if you are in a stable situation include how long you've been with your current employer and how long you've lived at your current address. Many lenders will want proof of this information, such as several recent paycheck stubs and proof of address.

4. Consider a Down Payment

While we're talking about proving to a lender that you're serious and stable, a down payment is an excellent way of showing them that you mean business. While this might seem hard when you're focusing on paying bills to improve your score, a down payment can be a manageable amount up front. Even a few hundred dollars can be the difference in a lender's eyes and can reduce the overall size of the loan, taxes, fees, monthly payments, interest rate, and length of the loan.

5. Know How Much You Can Afford

A car salesperson’s job is to upsell you on a car, and while all the bells and whistles might make your head spin and your eyes bug out of your head, it’s crucial to know how much you can afford and stay inside it. Don’t be afraid to do the calculations ahead of time, determining how much you can afford to pay per month and what that would translate to for the cost of a car. Looking only at vehicles that hit that range and below will help you find something you can afford.

 

Talk to Industry Changers

Traditionally, having bad credit relegated you to poor service, awful rates, a complete lack of options, or borrowing money from your Uncle Vinnie. However, lenders are moving to better options for potential borrowers.

 

At Auto Debt Capital, we’re changing the game to make it more accessible for people with bad credit. With same-day approvals, ground-breaking technology, and competitive rates, we can help people with bad credit. Check out our site to find out how we can assist you in obtaining the loan you need, no matter what your credit looks like.

 

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