If your credit score is currently bad, you might be wondering how to find a car loan with favorable terms. It can be very tricky at times. Most lenders will qualify you for subprime car loans, giving you higher monthly payments and less favorable terms. It is not good to lose hope if this happens though. Well, your credit score needs a bit of improvement, but you can still get a car loan that doesn’t interfere with the amount you have set for a month. A great way to repair your credit is by making consistent payments towards the car loan.
How people with bad credit can rely on auto financing
Know the credit score well
Just before the shopping process, getting to know the credit score is extremely important. Tools like my Bankrate provide free reporting on one’s credit, and can also shed light on factors behind the score. Some factors such as delinquent payments may be addressed immediately. Credit improvement actions may give you a favorable position with lenders.
There are quite a number of lenders who provide car loans for bad credit; they may be competitors for your business. While your score may be tarnished, you may still find better chances somewhere. To be safe, you might want to visit three distinct lenders within a two week period.
Have pre-qualification with credit unions and banks
This can be a very powerful negotiating tool even if you don’t think you can get a loan. A bad credit score may make it difficult to pre-qualify for a car loan due to the for-profit nature of banks. On the bright side though, having a good relationship with the said bank may give you more luck in landing a manageable car loan.
Credit unions may be more open to lenders with bad credit. They will need you to be a member, but it is relatively easy to meet the requirements.
Dealerships rely on subprime auto leads to find the cheapest car to fit your budget and credit score. Consumers will need to take long-term financial commitments such as cost of gas, repairs, insurance and mileage into consideration.
Which are the cheapest cars for subprime buyers?
These are the most economical car purchases as compiled by CarFinance.com:
- The Toyota Corolla
- The Toyota Matrix
- The Honda Civic
- The Nissan Altima
- The Honda Accord
For additional information about subprime auto leads for subprime buyers contact us today. AutoFriend Leads Inc. can help pair subprime buyers with car dealerships based on a buyers credit score and income.