Contrary to popular belief, you can get car loans for bad credit, no credit, or if you have gone bankrupt. The loan terms, including rates of interest are slightly different. You’ll have to pay higher interest rates, or pay a hefty down payment. Here are three things to remember when looking for car loans with bad credit:
A co-signer promises that the loan will be paid on time and agrees to repay if you fail to do so. They will need to have good credit and access to a secure income source. Getting a co-signer not only increases your likelihood of securing a loan, but also helps you secure a better interest rate. Sometimes, you can release your co-signer from the loan once a certain number of payments are paid on time. Remember, it is very important to be careful when involving a co-signer –this is because it’s not just yours but the co-signer’s credit worthiness also that is on line.
• Capacity to repay the loan:
Make a realistic assumption of how much you can afford to pay every month. The lender may try and convince you into stretching your budget by increasing the loan term. That makes no sense at all, because in the long term you may end up paying more than what the car is worth. If you’re in Nova Scotia and looking for car loans with bad credit, we suggest you check our car loan payment calculator.
• A bad credit report isn’t the only indicator of your financial prudence:
A bad credit report is certainly not ideal, but it is not a definite certificate of your financial wisdom. Lenders classify bad credit loan applicants into two categories, viz. those who’ve been subject to an unforeseen situation, and those who’re habitually inept at handling finances. Obviously, they’re not forthcoming to lend to the latter. But for those who’ve been in an unfortunate situation, they’re willing to overlook the credit report.
It is important that you know your credit score before applying for car loan. You may assume your situation to be bad only because you’ve missed a few payments. The credit report gives you a better understanding of where you stand. There are many options for people looking for car loans for bad credit. Read the lending agreement carefully to make sure you aren’t on the wrong end of the deal.
Author Bio :
The Author manages a bad credit car loan company in Nova Scotia. He also writes regularly to help people find a good deals.