You may wish to buy the car of your choice but your application for an auto loan may be unduly delayed or rejected by financial institutions because you have a poor credit score. But the good news is that there are certain other financial institutions that extend car loans for bad credit also.
A poor credit score may happen due to multifarious reasons. Somebody may fall sick in your house and because of heavy medical expenses; you may not have paid your monthly payments. Certain other developments may have depleted your resources and you may have defaulted in your payments. But, whatever may be the reason, if payments are not made every month, your credit score gets affected.
When your credit score affects your chances of getting the auto loan, you can try other ways such as offering a guarantor to vouch for your repayments or making a larger down payment for buying the car of your choice. But, these options may work only if your credit score is moderately affected. If it is very bad, the lending company may not agree to these options also.
In certain cases, low credit score may be due to repossession of bankruptcy and in such cases, you can never get reasonable rates, though a few lenders may be ready to extend such car loans for bad credit. The rates in these cases will definitely be very high. Instances of lenders charging as high as 22% in such cases abound. The monthly payments will also be very high and the applicants may find it very difficult to stick to the payment schedule.
There are many other options beyond dealership financing for getting loans to buy a new or used car. Perhaps, you may have opted for dealership financing because you do not know fully about car financing and how you should do comparative study of the options available.
Apart from dealership financing, you have banks, credit unions and many private finance companies that offer auto loans at highly reasonable rates and attractive terms. If you have a poor credit score, you can explore these options also and benefit. Further, dealership financing may turn out to be more expensive because they may increase the rates with an aim to increase their profits.
You can search online and find out lenders so that you can accelerate the process of getting car loans for bad credit. There are many lenders online who approve such loans despite your poor credit score. When you apply for such loans, you should provide these lenders with your details such as your current monthly income, present debts, your credit rating according to you and the amount of loan you want. The lenders will undertake a simple verification process of these details and if they are satisfied with these inputs, your loan is sure to be approved.
source ezine