Getting a Car Loan with Bad Credit: The Complete Guide

By Angela Monroe - January 13, 2020

If you have bad credit, getting a car loan can seem a daunting prospect – yet it doesn’t have to be. Getting a car loan with bad credit is certainly possible and you don’t have to accept hugely inflated interest rates or difficult loan terms.

At Loans for People with Bad Credit, we have years of experience working with people with bad credit so we understand the needs and circumstances that you may have. We have access to a wide range of lenders who can help to offer bad credit car loans to suit your individual situation.

Understanding Bad Credit

Firstly you need to know whether you have bad credit or not. Bad credit is generally due to a history of poor finances – such as defaulting on loans, making late payments or having been declared bankrupt. There are other reasons for having a low credit score however such as never having had a loan or credit card before, or sometimes by having a job that doesn’t have a regular income.

It’s really important to check your credit score before you start to make a car loan application. Bad credit car loans are available if you have bad credit, but you’ll need to use a company such as Equifax or Experian to quickly check your credit score free of charge.

Once you know whether you have bad credit or not you can figure out whether a bad credit car loan is the right option for you. If you think that there is an error on your credit record and it is lower than it should be, you can request for this to be investigated.

Top Tips for getting a car loan with bad credit

Once you have confirmed that you have bad credit, you can start to explore bad credit car loans further. For a stress-free approach, let Loans for People With Bad Credit guide you through the process – potentially saving you time and money.

  • Budget and plan: you need to know exactly how much money you’ll have to set aside for your bad credit car loan. Getting a loan that you can’t pay back will simply damage your credit rating further so it’s essential that you budget properly and don’t stretch yourself financially. Figure out all of your incoming and outgoing costs and find a reasonable amount you can dedicate to car loan repayments.
  • Figure out a loan term: bad credit car loans often have loan terms which don’t work for everyone. By working out in advance how long you need to pay back your car loan in full, you’ll be able to search for the right loan term for you – knowing exactly what to look for.
  • Take interest rates into account: remember that you’ll be paying interest on your bad credit car loan. These rates are generally higher than with standard car loans. You’ll want to factor in the costs into your repayment schedule so you don’t get any nasty surprises.
  • Don’t make multiple applications: let Loans for People With Bad Credit handle everything for you and you won’t fall into the trap of panicking and making multiple applications to lenders. In fact, this can further damage your credit rating and it will raise alarm bells with potential lenders in the future as each application is recorded.
  • Remember the costs associated with a car: if your bad credit car loan is approved, remember the costs don’t stop there. As well as your monthly repayments, you need to make space in your budget for insurance, road tax and emergency repairs and maintenance.

Use bad credit car loans the right way

Used correctly, bad credit car loans can be an excellent way to not only get you back on the road but also to help you to start rebuilding your credit rating. Pay your monthly repayments in full and on time and you’ll be able to show future lenders evidence of responsible borrowing.

 

Loans for People With Bad Credit can help you through the process and ensure that you are always on the right path. With years of experience working with people with bad credit, we know how to find the right car loans for you and look forward to helping you save yourself time, money and stress.

Angela Monroe
Angela Monroe is the Community Manager at The Positive Group, specialising in giving people the information that they need when they need it, and putting you on the path to a fair financial future. She has 8 years of experience in helping Australians find the right finance solutions, and regularly contributes articles to empower Australians with the knowledge they need to become financially healthy.

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