If you have bad credit and you want a car loan, the reaction will be that it is difficult but if you know few things and follow some guidelines, it is not that difficult and becomes easy for you. Here are the various points explaining how you can get a car loan with low/bad credit rates.
Car Loans with Bad Credit and No Money Down
- First of all, if you want to get a car loan without good credit, you have to be realistic. Most of the car shoppers don’t like to give you a car if you have low credit because the amount the bank lends them is too low compared to their expectations.
- Sometimes the car shoppers may keep the documents and finance papers with them as security. There is nothing wrong in that do keep this thing in your mind. You have to be very careful because in rare cases the car shoppers will give you a car without any down payments.
- You can search for the car dealership that specially lends money to the buyers with low credit scores.
- But here what you have to suffer is the high interest rates because normally loans with low credit are charged higher rate of interest.
You will require following things
- Bank Account
- Driving License
- 6 References
- Telephone Bill
- Electricity Bill
- Down Payment
- Co-Signor (possibly)
- Car Insurance
- Once you decide that which car dealer you want to deal with, they will demand for the bills, driving license, address proof, job validation proof etc. this things you have to provide to assure the security.
- You may also be asked for insurance, personal checking account, bank account statement, references etc. here you have to be realistic and present which document they require. Whenever they as for a meeting with all the documents, be well present because dealers want to talk to you personally before taking decisions.
- Once the deal is decided, you can bargain on your interest rates but don’t be scared with the initial interest rates. They can pout in to program with lower interest rates later on after 12-14 months.
Average Interest Rate on Car Loans with Bad Credit
- Average interest of car loans used to be between 10-12%. But if you have bad credit score, the interest rate for your loan may go up to 13-14%. This is the maximum interest rate you can get. It makes no sense in getting a loan more than 14% interest rate in spite of having bad credit rates. Ultimately, the documents and financial papers related to car are going to be with them. So interest rate should be within the range of 10-14% for any car loan. It may fluctuate in this range but not more that that.
- So, with proper documentation and at fulfillment of all conditions laid by the dealers, you can easily get a car without having a good credit score. You have to be very regular in the transactions with these dealers because it helps you to rebuild your credit and everyone wants that their credit gets built.