How to Get Auto Financing With Bad Credit

A lot of people simply can’t afford to pay cash for new cars and have to rely on financing. You eligibility, loan repayment amount and interest all depends on your credit score. If you have a low score, then not only will you have to pay a high amount of interest, you may be rejected in the first place.

Keeping a good credit score isn’t always easy. All it takes is one or two defaults and you’ll suddenly find yourself in the ‘sub-prime’ category. If this is the case with you, don’t worry. In this article, we’re going to be talking about how you can get auto financing even with a low credit score:

Apply For a Loan from a Credit Union

Compared to other financial institutions, credit unions are quite lax on their requirements for things like car loans. This is especially true if you’re a member of the credit union. In order to gain a membership all you need to do is submit an ID that has been issues by the government and hand in the minimum deposit, which is usually pretty low.

Once you’ve opened an account, discuss getting auto financing with a loan officer.

Finance Directly Through the Dealership

You don’t have to depend entirely on financial institutions because a lot of dealers offer financing these days. And the good news is that they are much more lenient and therefore more willing to take a risk with people who have bad credit. You don’t even have to show up in person as you could be approved over the phone. Usually, if you’re credit is really bad, you’ll be paying a bit more interest but if you go through a financial institution it’s highly likely you’ll be approved at all.

If you’re looking to finance a brand new SUV, we highly recommend you visit and check out how you can go about applying.

Finance through Sub-Prime Lenders

These are institutions who lend specifically to people with bad credit. All you need to do is search for ones in your area or state and submit an application. Most of the time, you’ll be approved within a few minutes. Before you sign on for financing however, make sure that you read the terms of agreement carefully and look for dangerous loopholes that could leave you in a very difficult situation to get out of.

When financing through sub-prime lenders you’ll end up paying a lot of interest. Therefore, before you resort to this, we highly recommend you look into financing through a dealership first.

Ask Someone to Co-Sign

If your credit is bad, you can partner up with someone who has much better credit in order to get approved. All three types of lenders we’ve discussed above will typically allow you to get a co-signer. The co-signer will either need to sign the documents in person or at the very least, send in identifying information. If you’re buying a car, then you most likely have to go through financing. This can be hard to do if you have bad credit. Fortunately, there are still ways to get approved, as we’ve discussed

Leave a Comment

Your email address will not be published. Required fields are marked *