When looking to buy a new or used car, consumers often times feel ensnared by their bad credit and view purchasing a vehicle as unfeasible.
Not only do consumers with low credit ratings face higher interest rates on their car loans, but car dealerships may attempt to add additional fees and finance charges to their purchase price. Bad credit car financing provides consumers with bad credit a safe and effective avenue by which to purchase a new or used car.
Individuals should consider taking the following steps prior to choosing a bad credit car loan.
Review Credit History Reports
Bad credit car finance may be a good option for anyone with a low credit rating, but it is important for consumers to know their actual credit score and what that score means.
Consumers that know their credit score have more bargaining power when it comes to auto loans for bad credit, and they can ensure that they are being offered the best interest rate possible.
Credit scores between 500 and 600 are considered poor, scores between 600 and 700 are more acceptable, and scores over 700 are considered excellent.
Three different credit bureaus issue credit reports, and consumers should check their credit report with all three companies at least one time per year.
Financing Options: Dealership or Bank
Ideally, before even walking onto a car dealer’s lot the consumer would already have a pre-approved loan from a reputable financial institution.
Consumers in need of bad credit car finance may not have this luxury, but it would certainly be worth the time and effort required to try and secure a loan from a bank. If bank financing is not an option, the dealership will most likely have bad credit car finance plans available.
Dealerships generally offer new car finance and used car finance options, but consumers will want to carefully review the terms and conditions of the loan before financing through the dealership.
Consumers should be aware that the dealership will often try to tack on additional costs that increase the final loan amount.
Knowing When to Refinance
Because bad credit car finance typically carries with it higher interest rates, consumers should know when bad credit car refinance is available to them. In general, when consumers have made full payments on time for at least 6-12 months, lenders will be willing to refinance the loan. This will mean lower overall payments and provide more breathing room in the consumer’s budget. Bad credit refinance will be a step in the right direction toward establishing or re-establishing good credit.
Is A Bad Credit Car Finance Specialist The Right Choice?
Bad credit car finance may be the answer to consumer’s bad credit woes when they are in desperate need of a reliable vehicle.
While bad credit does take time, perseverance, and commitment to overcome, it is not an impossible feat.
When consumers are armed with a little knowledge it can help them go along way in obtaining a loan at the best interest rate possible, and purchasing the car they so badly need.