Getting an auto loan is necessary for even the most inexpensive car the manufacturers have on the market. Auto loans for those with bad credit may be a bit tricky to land, especially if you are looking for one with low interest, comfortable repayment terms and no money down. But it can be done if you know the variables and take some pointers.
Variables Regarding Your Auto Loan Payments
Since the amount you are going to be paying every month should be a large consideration, take into account the four big variables that will influence your payments. How much does the car cost? How long will the loan be on the books? What is the interest rate? How much do you have to put down? You do have some control over some of these aspects of your auto loan for those with bad credit.
Strength of Control
You can always opt for a less expensive car. You can ask for a longer payment term. Both of these will lower monthly payments. Your credit score is set and that will be a large factor in determining your interest rates. The down payment may be out of your control completely if you have not saved or if your cash flow prevents it.
Your Credit Scores and Interest Rates
Your credit scores may vary slightly among the three credit reporting agencies, Experian, Equifax, and TransUnion. They will generally be termed as poor, fair, good or excellent. With poor credit (below 600), you will not be able to get the lowest interest rates. This could cost you hundreds over the life of the loan. Really poor ratings could prevent you from getting an auto loan for those with bad credit at all.
Putting Down Cash – Or Not
Putting down cash makes three things happen. One, it will lower your monthly payments according to how much you put down. Two, it will show the lender that you have some financial responsibility. Three, it shows that you have considerable interest in the deal and are likely to repay. All of these considerations make a lender more likely to grant an auto loan for those with bad credit.
Five Pointers to Getting a 0% Down Auto Loan for Those with Bad Credit
If you have poor credit scores and no money down, here are five steps to make your auto loan for those with bad credit happen:
– Point One: Pull Your Credit. Run your credit scores on all three agencies mentioned above. You will do better in your negotiations if you know how the lender or dealer sees you financially.
– Point Two: Know Your Lenders. Make a list of lenders who advertise themselves as bad credit or any credit lenders. You can find them online and even go through the yellow pages. Do not even bother with lenders who do not advertise themselves as such.
– Point Three: Shop Around. Whether you do it online or via telephone calls, you will want to find lenders who offer the lowest interest rates and best repayment terms.
– Point Four: Apply to the Top Three. Once you have narrowed the field to three according to the above criteria, make applications to them.
– Point Five: Prepare to Negotiate. Do not necessarily accept the first offer extended, even though you have bad credit. Lenders and dealers want to make more money. Always ask if they can do better. And do not settle until you have final offers from all three lenders.
You Will Be Driving Soon
If you take into account the variables that affect your monthly payments and understand what it takes to make zero percent down, you should easily land your auto loan for those with bad credit with 0% down. And you will be zooming down the road in no time in a vehicle you can afford.