Dreaming of driving a new car, but tormented by a poor credit history? Don’t worry. There are funding options available.
Shop Around
True, a perfect credit history can get you a better loan with lower interest, but if you shop around, you will be surprised at the financing options out there. First off, don’t rush into anything. Buying a new car is a big deal and should be thought through carefully. Take some time to save a few bucks every month. In no time you will have a nice sized down payment. The more you can put down, the less you will need to borrow. Also, don’t switch jobs just before looking for a loan. A solid work record will improve your chances for loan approval.
The Sub Prime Loan
You may try for a Sub prime auto loan. These loans are designed specifically for people with a poor credit history. And don’t forget collateral. If you have good collateral, the lender has security and is therefore more likely to give you a good deal. Anything you own outright or something with enough equity, like your house, can be used as collateral. But, a steady income is still the most vital point for securing any type of loan.
Get a Co-Signer
Getting a co-signer with good credit is another option for obtaining the car loan you want. With the co-signer taking equal responsibility for your loan the lender feels more confident in lending you the money you need. And you will get a better interest rate, too.
Choose Your Lender Carefully
Aside from the type of loan you need, you also need to consider who you are borrowing from. Car dealers are usually not your best choice. They want to sell you a car, usually more of a car than you can actually afford. They are more interested in the incentives they get for securing your loan than they are in getting you the best loan for your circumstances. It is better to get your own loan on your terms!