Auto Loan with Bad Credit: Advice for Consumers with Really Bad Credit Scores (600 or Less)
If you have a really bad credit score (eg, 600 or less) and you want to get an auto loan, to be frank, your options are extremely limited. Why is this?
Because you probably have some severe infractions on your credit report (ie, repossessions, lots of really late/past due accounts, judgments, bankruptcies, etc.). This makes you a severe credit risk, which means you’re going to pay through the nose for it with a high interest rate.
If you’re prepared for this, read on for what not to do.
The One Thing You Should NOT Do When Applying for a Car Loan with Bad Credit
Do NOT apply for a car loan though a car dealership. Why?
Because they are most likely making a commission off of you. How? It works like this . . .
Car dealerships have a vested interest in you getting an auto loan. So, they partner with loan companies to help customers secure car loans. What this means is all they do when you apply for auto financing through them is submit your info (credit application) to the lender they’re partnered with.
What Most Car Buyers Don’t Know When Applying for an Auto Loan with Bad Credit
If you get approved for a car loan, THEY make money off of it. And the kicker is, the higher the interest rate you pay, the more money they make. So they have no interest in giving you the best deal on auto financing. And even if they did, they have no power to control your auto loan terms. The loan company determines this INDEPENDENT of the car dealership.
How to Get the Best Deal on an Auto Loan When You Have Bad Credit
So, how can you be sure you’re getting the best deal on an auto loan if you have bad credit?
Try other lending sources — your local credit union, your neighborhood bank that you have a previously established relationship with, or online lending sources (there are thousands of auto loan lenders online; many you probably never heard of). This makes it worth investigating. Just be careful to make sure it’s a legitimate lending source.
The One Thing to Remember When Applying for an Auto Loan with Bad Credit
The one thing to keep in mind when trying to get an auto loan with bad credit is to stay away from dealerships. They don’t have your best interest at heart. Or, take our preferred advice which is, “The best auto loan is the one you never take out.”
P.S.: Repair bad credit in 37 days — guaranteed! And, get the FREE credit repair report, 6 Credit Repair Myths and 6 Specific Ways to Raise Your Credit Score and start repairing your credit today!
Copyright 2009: NoCarCredit.com. This content may not be reproduced or redistributed without the express written consent of the author. Violators will be prosecuted.