How to Find A Good Bad Credit Car Loan Deal

FinanceLoans / Lease

  • Author Shelly Evans
  • Published June 16, 2011
  • Word count 509

If you have bad credit, you may find it a lot more difficult to find a reasonable loan deal. Many lending companies that advertise low rates have very strict credit requirement. This is why consumers are advised to wait until their credit improves before seeking a car loan or any type of financing. But what if you need to buy a car at this time? Does this mean you have no other option?

It’s great to know that some car loan lenders offer special programs for customers who are credit challenged. Although you may have limited options, you can still get the car loan you need if you explore the market.

Check out the following tips on how you can get an affordable bad credit car loan deal and avoid being ripped off by predatory lenders.

Shop around for good deals. Begin your search online and look for lending companies that offer bad credit loan financing. These lenders have less rigid credit requirements as long as the borrower meets the other prerequisites such as having a stable job, a permanent residence, or reaching the minimum income bracket. Gather quotes from different car loan companies through their websites or through a car loan broker’s websites.

Do you have friends or relatives who have previously applied for a car loan? If yes, you might be able to get referrals from them or they might be able to recommend a reputable lending company for you.

Check out credit unions. Inquire from credit unions in your locality if there are available programs for a car loan. Because these organizations have been created to assist consumers, you are more likely to get a much lower interest rate from a credit union than banks and commercial lenders, even if you have bad credit.

Don’t settle for the first offer. Because you have bad credit, you may feel that you don’t deserve a better deal. But that’s not true! You should never settle for an unreasonable offer! Even with bad credit, lenders must still treat you with respect and dignity. In fact, you should not grab the first offer you are given. Instead, try to negotiate for a lower rate. You may request the lender to give you a chance to enjoy a lower rate as long as you can submit your monthly payment on time. Most lenders will not give their best possible rate unless you ask for it.

Watch out for scams and predatory lenders. Even if the offer seems incredible, take the extra time to study the matter. Have you read the fine print? See to it that you will not be charged with hidden fees and that you understand how the rate is calculated.

There are lending companies that advertise quick approval or low rate without disclosing the other fees associated with the loan. If you’re not careful, you could sign up immediately only to find out later on that you’ve been tricked into a loan packed with high fees and an increasing interest rate.

Shelly Evans is a freelance writer and loan consultant. The website http://www.badcreditresources.com offers resources that specialize in providing bad credit loans and bad credit cards to people with bad credit.

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