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Are There Car Loans For People With Bad Credit? (Yes!)

Are There Car Loans For People With Bad Credit? (Yes!)

Bad credit? No problem! We handle car loans for people with bad credit. Find out how you can still get approved even if you're credit isn't the best.

Keyword(s): car loans for people with bad credit

Are you one of the 42% of Canadians who keeps a running balance on your credit card? Even if you're in the processing of paying it down, you may have poor credit. However, you should know that there are car loans for people with bad credit.

First, it's important to understand what "bad" credit means. Credit scores typically go as high as 900 and as low as 300.

If your credit is under 600, you may not get automobile loans, mortgages, or other types of financing. Yet this doesn't mean you have to ride your bike to work or take public transportation.

Many people have discovered are several ways to get car loans for people with bad credit. Before you get that far, take a few other steps.

1. Get a Copy of Your Credit Report

You are entitled to get a free copy of your credit report from reporting entities. Simply make your request online and receive a PDF.

When you get your credit report, check it for errors or even fraud. See something that doesn't make sense? Do something about it.

Be assertive about inaccuracies. You'll get your credit score to where it should be faster.

2. Start Paying Your Bills on Time

Have you missed a lot of bills because you simply couldn't pay them on time? Do you have a disorganized method of paying back creditors?

After receiving your credit report and evaluating your history, change your habits. Pay bills before the due date. Keep bills in one place.

This will help to slowly improve your credit and show you are now acting responsibly.

3. Chip Away at Your Credit Card Balances

Whenever you have a little extra money, use it to pay down credit card balances. The lower your balances, the higher your credit score is likely to be.

Again, this will show an auto loan provider that you are a better risk even though your credit score is low.

Solid Ways to Get Car Loans for People With Bad Credit

Now that you have done some work on your credit scores, you can begin to look for the right car loans.

Below are some of the easiest ways to help pay for your next ride.

Figure Out How Much of a Loan You Can Afford

Prior to talking to a potential lender, be sure to evaluate your financial situation. See how much of a loan payment you can realistically afford.

The more you know about your own money situation, the better the conversation. Plus, they will know that you are taking the lending process seriously.

Find Dealerships That Offer Bad Credit Financing

Want a quick way to get yourself in front of the right lenders? Shop for a new car at a dealership that offers special bad credit financing.

These types of car dealers are accustomed to working with people in your situation. Not only will they have excellent solutions for your issues, but they can help you get a car at their facility.

Go to a Face-to-Face Lender

Can it be tempting to stay behind your computer screen and try to get a bad credit loan online? Absolutely, but it's not recommended for the whole process.

Feel free to do research on car loans for people with bad credit. Then, plan to work with someone face-to-face.

For example, fill out an application for a loan with bad credit with a dealer using an online portal. If you are accepted, you can then proceed.

The human touch goes a long way when discussing financing. Plus, you will be able to ask more questions.

Look for Loans With Higher Interest Rates

You may be eligible for a substantial loan to offset the cost of your car. The catch? You will pay a higher interest rate.

This doesn't mean that the lender can charge you too much. However, you can expect to pay percentage rates in the double-digits.

Remember that if you pay down your high-interest auto loan faster, you will incur less interest overall. You may be able to refinance at some later point, too.

Put a Big Down Payment on Your Vehicle

It's going to be easier for you to get a smaller vehicle loan if you have a low credit score. With this in mind, save up to put a big down payment on your car or truck.

For instance, if you want a vehicle that costs $12,000, consider putting $5,000 down. Your loan will be much smaller than if you only offer $1,000 or $2,000.

Buy a Used Car Instead of a New One

Do you have your sights on a new vehicle? Choose a slightly used one and you'll have a better chance of snagging a loan.

Used cars can often be a great bargain. Additionally, your lender will see that you are being realistic in your choices.

Ways to Improve Your Bad Credit

Got your auto loan? Congratulations! Now, it's time to repair your bad credit.

The following steps work well for individuals who are looking to secure car loans for people with bad credit.

  • Put yourself on a budget to limit excessive spending.
  • Learn to pay off your bills before buying things you don't need.
  • Pay off any outstanding bills. Call your creditors to come up with payment plans if necessary.
  • Be on time with all your payments. No bill should be overlooked.
  • Get help organizing your bills. Try using an online calendar reminder or app to keep you from missing payments.
  • Check your credit scores at least three times a year. Again, this is a free service and helps you stay on top of changes.
  • Get rid of most of your credit cards. Keep one for emergencies.
  • Use cash instead of your debit or credit card for purchases. Give yourself an allowance and stick to it.

Over time, your credit scores will go up if you make some little everyday adjustments. The next time you go to buy an auto loan, you may get one with a smaller percentage rate as a reward for your hard work.

Need a car now? Read on about our guaranteed car financing.

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