When you’re in debt this effects more than just your bank account and can create all kinds of difficulties. For instance if you are struggling with debt then you will have a lot of difficulty getting out loans (which is bitterly ironic as this is when you are most likely to need a loan) and this covers everything from mortgages to business loans to car loans. That can then in turn effect your life in a lot of other ways as it means you can’t buy that car you wanted, you can’t move home or you can’t start that business. Here we will look at how to get a car loan even with bad credit so that you at least have transport.
The first course of action you can take is to look for bad credit car loans which are designed specifically for people who have low credit. These car loan companies charge slightly more than other car loan companies, but this then means that those paying higher rates and completing their payments help them to make up for those who do not manage to make all the payments on time (which theoretically would be a higher proportion than normal).
Bad credit car loans help those with bad credit to finance their vehicles. However there will still be those whose credit means they are not viable for a loan. This is where ‘guaranteed’ car loans come in, which guarantee a loan regardless of your credit rating – though you can of course expect to pay more still for these as it is high risk for the lenders.
There are other strategies you can take to get your car loans too. One is to reduce the cost of the loan by choosing a less expensive vehicle such as a second hand vehicle (and then you can take out a used car loan). Likewise you can pay more towards your vehicle up front, and you may want to sell your old car in order to go towards the new cost.
Make sure you shop around and look for the best rates you can find on your car loans as prices will still vary. You can also talk about changing your repayment schedule to best suit your particular situation, or consider securing your loan against your home – this way you give lenders a guarantee that they will get their payment. However don’t consider taking out secured loans unless you are certain you can repay them.
If you still can’t find car loans to suit your needs, then you might need to improve your credit rating before you attempt to buy a new vehicle. There are many ways you can achieve this such as ensuring that you are not financially linked to anyone you shouldn’t be, paying off current debts and using a credit card correctly.