Bad credit doesn’t mean that getting auto loan is impossible. It just means that you’re going to need to work a little harder to procure one. If you have bad credit (and don’t have the time to improve it), here are the steps that you should take.
- Check your credit report. Your credit score could be artificially hampered by mistakes. While you might not have time to actually improve your credit, you could have time to correct inaccuracies — and that will improve your credit score immediately.
- Apply for auto loans at banks and credit unions. You don’t know whether you can qualify for an auto loan before you try. Applying to multiple lenders for an auto loan will only count as a single pull of your credit report. It’s in your best interest to compare as many different places as possible.
- Pay attention to your interest rate and length of repayment. When comparing loans, look at both the interest rate and the length of repayment, rather than the monthly payment. A low monthly payment over a long period of time could lead to you paying a significant amount.
- Avoid subprime lenders. Subprime lenders are lenders who claim to accept anyone, or who specifically court bad credit and no credit borrowers. They tend to have very high fees and interest rates and will ultimately make your car purchase more expensive.
Sometimes, you may need to get a co-signer or wait until your credit score is restored. Before you decide, you should check with a lender.
