You Can Get the Car Loan You Need – Even with Bad Credit

If you have a spotless credit history, getting the car loan you need should not be much of a problem. You simply apply for the loan, wait for the approval to come in, and then hit the lots in search of the vehicle of your dreams.

Getting a car loan is not so simple of your credit history has a few blemishes on it. If you have a history of missed payments, late payments or bankruptcy, it can be much harder to get approved for the car loan you need to get back on your feet. Even if you do get a loan, many banks will expect you to pay more in interest, and that could mean thousands more dollars out of your pocket over the life of the loan.

Solutions for bad credit, repos, bankruptcy

Fortunately there are some things you can do to tip the odds in your favor and get the loan you need at an interest rate you can afford. One of the first things to look at is getting a cosigner. If you have a family member or trusted friend who would be willing to act as cosigner, you may be able to get a loan on the strength of their credit. The downside is that your cosigner would be on the hook if you miss a payment, so you need to be extra vigilant about paying that money back on time.

If you cannot find someone willing to cosign a loan, you may be able to get a better interest rate by working with a credit union instead of a bank. While banks are owned by their shareholders, credit unions are owned by their members. That often means lower interest rates on loans and better rates on savings and investments. If you are currently a member of a credit union, it is definitely worth a few minutes of your time to inquire about car loans. Credit unions are often willing to write auto loans when banks are not, often at favorable interest rates. If you do not currently belong to a credit union, you might want to look into opening an account and asking about their special loan offers.

Dealerships may have a bad reputation, but all they want to do is sell cars, which works in your favor.

In addition to the routes outlined above, many drivers with bad credit have found success working directly with the dealership where they plan to buy a car. Car dealers are generally anxious to sell cars, and that means they may be willing to work with buyers whose credit is less than perfect. 

If you choose to work directly with a dealer, it is important to get all of the loan terms disclosed in writing and to review them carefully. That is the only way to determine how much interest you will be paying and on what terms. It is just as important to review the fine print regarding missed payments and fees for late payments. Understanding the potential fees and penalties, as well as the interest rate, is critical when shopping for any car loan.


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