How To Get a Car Loan When You Have a Bad Credit Rating

Having a bad credit won't stop you from getting a car loan.  It will limit your options, though.  As the saying goes, when there's a will, there's a way.  Not all lending institutions' approval depends on a borrower's credit rating.  Some may be willing to help you out given good circumstances.  They know that bad credit happens and you have your own reasons why your finances got out of hand.

First things first: ask yourself, "Can I pay this loan?"  Remember, your credit is bad even before you make this loan, are you sure you can take another one? Assess your financial condition first.  Lay out all your cards so you can get a quick picture of how you are doing financially.  Weigh out the consequences of getting a car loan by comparing your monthly income with your monthly expenses.  If you see an opportunity that shows you can accommodate this new loan, then go.

Do you have a phone?  A phone is a basic requirement in applying for a loan.  How can loan officers verify your identity and contact you for inquiries and pertinent information when they cannot even reach you? "No phone, no loan" so they say.

How long have you stayed at your present address?  You should be staying there for a year or longer to get the chances of your car loan being approved.

Are you a member of a credit union?  Oftentimes, you can get a loan through a credit union when you cannot secure one from a bank.  Credit unions have a personal relationship with their members so may become more lenient with requirements.  Of course, it is best if you have been with them for a long time already.

Some banks, especially the local ones, can be more understanding of your situation.  This is especially the case when they notice that you were not in bad credit in the past and just got in a financial mess recently.  What is important for them is how you will be able to pay for the loan.  If you have had a loan with them in the past and you were able to pay them diligently, then chances are, they will trust you with another one.

Your last option will be to go to a buy-here-pay-here car dealer. Usually, they are the car dealers with the huge signs in front that say "We finance anyone."  They do not forward car loan applications to banks so your bad credit rating will not affect your application at all.  They will be the ones to finance your loan.  The same personal requirement on your part still applies here, though.  That is, explaining to them how you will be able to pay during the duration of the loan.

A bad credit rating is not always the end of the line for you.  These tips may work or not but it sure is worth a try to get the car that you need.


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