How to Get Bad Credit Car Loans The shaky economy has made many people end up having bad credit. This, however, should not spell doom for your financial situation. There are simple things you can do every day to improve your bad credit situation. If you are disciplined and have the willpower, you will find yourself out of a bad credit situation by applying these simple measures. There are various steps you should follow before and during the application process of a bad credit loan. When you get an affordable bad credit car loan, it will be easy to improve your credit score. Here are the steps to follow before applying for a car loan:
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i) The first step is to get your credit report. The national credit bureaus usually offer the reports for free every once a year.
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ii) Striving to improve your credit score will improve your chances of getting a good interest rate and securing you a reasonable down payment. Improving your credit score will take time but is necessary if you would like an affordable loan. iii) Lenders are more likely to approve your application for a loan if you are employed. In fact, it is recommended to be in one employment for at least ninety days or more. If you are in permanent employment, the lender is also likely to offer you more favorable terms. iv) If you can provide a large down payment, lenders are likely to finance you. The down payment usually serves as your commitment to paying back the loan. v) Just because you have a poor credit score does not meant you should not look for a loan with the best terms. Just like shopping for anything else, comparison shopping will help you make to an informed choice of the best bad credit car loan to work with. vi) Apply for a loan from lenders that specifically deal with consumers that have bad credit. Below are the steps to follow when applying for a bad credit car loan: i) Go for a used vehicle instead of one that is new to keep your costs down. You will require a lower amount of loan for a used car than for a new car, which will mean a lower debt. This will also lead to lower risk to the lender. ii) Get yourself a guarantor with good credit history. You will get better loan terms when you have a cosigner with a high credit rating. When you get approved for a bad credit car loan, you can tidy up your financial situation through timely payment of bills, having a steady income flow and a real budget. Also, find a way to increase your income to ensure you do not end up having problems paying back the loan.
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