“The car has become a secular sanctuary for the individual, his shrine to the self, his mobile Walden Pond.” – Edward McDonagh
Cars are not just a mode of conveyance for us. We love cars and wish to own one that gives extreme joy and social status as well. If you are looking for a car, you must concentrate on obtaining car loans. It is because the sky-rocketing prices of cars have made it impossible to buy a car with cash.
When you apply for a car loan, your credit score is taken into consideration with several other factors. If you have bad credit score, like most other people who have suffered through the economic recession, you will have to remain extremely cautious. It is because a single mistake can result in unnecessary high interest rates. It may even damage your chances of improving your credit score. So, here is a list of essential tasks that you should assume in order to complete the car buying process successfully:
TASK 1 – PREPARING FOR BAD CREDIT CAR LOAN
A. Create A Budget
Calculate your budget so that you don’t buy a car that is not in your price range. If you ascertain your spending limit, it will help you in negotiating affordable loan payments with the lender. If you are confused about what income and expenses to consider, you can use online car loan calculators available in the market.
B. Save for Down Payment
Most lenders offer high rates on bad credit auto loans. If you obtain a huge loan amount, you will have to spend more money on interest. But, you can turn this losing situation into a victory by making down payment. Down payment will lower your loan amount and will help you in making lower payments as well.
But, don’t worry if you don’t have money for making down payment. You can trade-in your old car and avoid paying in cash. There is one more alternative to help you avoid down payment and it is called bad credit no money down auto loan program. You can avail this loan program at slightly higher interest rates.
C. Complete Paperwork
Bad credit lenders have become lenient and made approval easier. So, you won’t need additional documents for securing bad credit auto loans. You just have to provide:
1. Identification Proof (SSN)
2. Income Proof (Employee Verification Letter, Recent Pay-Stubs)
3. Financial Statements (Bank Details, Tax Information)
4. Receipts of Utility Bills
TASK 2 – APPLYING FOR BAD CREDIT CAR LOAN
Gone are the days when bad credit car buyers had no place to apply for an auto loan. Today, you can get bad credit car loans from:
1. Online Auto Financing Companies
2. Car Dealerships
3. Credit Unions
4. Traditional Banks and Other Lenders
Before you start submitting loan applications to everyone, make sure that you understand their loan approval criteria and apply with the lender/dealer that suits your
financial condition.
Usually, online companies have the least stringent requirements and higher approval ratio. It is because they work with a network of sub-prime lenders and dealers. So, they have the advantage of forwarding your application to other lenders if the first one rejects it.
So, search for a reputed online auto financing company and apply for the most suitable auto loan option that improves your credit ratings. Hope you become successful in finding the best bad credit auto loan program. All the best!