Securing the Right Financing for Your Car with Bad Credit
If you have made a few late payments on your utility bills and or your credit card is maxed out, you may be worried whether you will get approved for a car loan. The good news is even with bad credit; you can still secure financing and get the car that suits your needs at Rent 2 Own Cars
How to Go About Securing Financing
Looking for finance with bad credit is certainly not a good point to start from, but if you are already in it, then you have no option but to find the next workable solution. The following are some of the steps you need to take in order to eliminate chances of you not getting approved when you apply for financing.
1. Start Preparing Early
The best point to start is by running your credit report so that you can see how it will look to the lender. If you are planning on getting financing, you should run your report 3 months prior so that any outstanding item can be dealt with in advance. Pay close attention to the risk factors as pointed out in the report and use them to rehabilitate your credit.
2. Get Pre-approved and Select a Dealer
When looking for finance with bad credit, you should be prepared to pay a higher rate of interest or price for the car compared to having a good credit rating. Even with this, some rates will be better than others hence the importance of seeking approval from different lenders. This will allow you to compare the rates and pick the one that gives you the best.
3. Bring With You Documented Evidence of Good Credit Risk
When talking about financing, you need to back up your claims with important paper work. Let the documents show the dealer who you are and your history of making timely payments and contact persons the dealer may get in touch with in case you stop servicing your loan. Some of the documents here include your driver’s license, your utility bill and your recent pay slip.
4. Don’t Trade Up
Some dealers may take advantage that you have a bad credit history and offer you a chance to trade into another vehicle while assuring you that the monthly payments won’t be as much different. While this may look tempting, the reality is, it secretly adds more debt to your loan. In the event you want a larger or nicer car, the best strategy is to refinance the current loan for a lower interest rate and then stick out the loan until you pay off the initial car. When it comes to purchasing your next car, you will be in a higher credit tier.
Always remember to stay within your price range and go for credit you can afford to service so that you don’t end up rolling back to the same or even worse credit history. Talk to a consultant at Rent2 Own Cars about a car payment plan that suits your budget.