Bad Car Credit Loan - Avoid The Pitfalls of a Bad Car Credit Loan - No Credit Check Auto Dealerships, Bank Loans with Bad Credit

In today’s fast-paced society, everyone needs a car to get around. If you have less than exceptional credit you have to watch the loans you will qualify for. You will be able to find a car loan but in most cases the interest rates combined with the monthly payments will make you pay more that the car is worth. In the current economy, if you are looking for a car loan from a private bank with less than perfect credit you are out of luck. Don’t fret, there are still ways you can get the car you need, even with your bad credit.

No Credit Check Auto Dealerships

You can find a car loan for bad credit in every city. You have probably seen the signs on used car lots in your city. We Finance; No Money Down; Drive Away Today. You will get a car from these dealerships, however the interest rates you will have to pay will be so high it may not be worth it. These lots are willing to give you the loan you are looking for because they will get more than the car is worth from you.

Companies who offer these loans will often require collateral for the car purchase. They are fine with loaning you the money because if you do not pay they will simply take the car and whatever you used as collateral. Be careful when entering into one of these deals and make sure you can afford the note. They can get you out of a quick spot when you have to have a car, but get only what you need to get by.

Bank Loans with Bad Credit

Even with bad credit, a new car loan can be obtained with a co-borrower. Banks allow lower interest loans with co-borrowers because if the primary borrower cannot pay the note, the co-borrower will agree to take over the payments. In order to qualify as a co-borrower on an auto loan the person you choose must have better than average credit. Your loan will be based on their credit rating so you will get a better interest rate. If you have very bad credit this may be the only way you will be able to receive a loan for a new car at a good interest rate.

When looking for a car auto loan with credit bad or good, try applying for a loan with a small down payment. Paying a down payment will not reduce the interest rate on your loan; however, it can reduce the amount of monthly payments and help you afford the car you want. A good starting point for a down payment is 10% of the value of the car.

Your best chances of getting a good auto loan with bad credit is to gradually improve your credit score. You may need to take the loan you are offered at a less than favorable rate until you increase your credit rating. The good news is, with every payment you make, your credit will improve. You will not have good credit over night, but over time your credit rating will improve and you can refinance your loan at a later date to get a better interest rate.