Finding Auto Financing When You Have Bad Credit
It becomes a mind set to a lot of people that owning a car is a necessity. Often times it is something you must have especially if you live in an area where there is not much reliable public transportation. Some progressive cities have created an effective system of transportation for mass commuters so that people will not need to own cars, but the number of people who can benefit from these systems is still limited. For a lot of people, it is still best to drive your own car to go to an office, school or mall.
Most cars can be purchased immediately but, if you are already facing loan problems from your past debts, you are going to have a hard time getting car financing. However, you must not give up because there are ways you can get financial assistance for your car buying, you just have to be resourceful to find the most suitable solution for you.
You can begin your quest by trying out the loans offered at local banks in your area. This the best place to get a loan because the interest rate is often lower. The only time this may not be true is if the car you want is brand new and the car manufacturer is offering a low rate car loan just to move vehicles. A good tip for getting approval for a bank loan is to first establish a relationship with the bank before applying for any loans. You can do this by opening a savings or checking account with them. If you are going to have a checking account, you should make sure not to overdraw it of course.
If you can’t get financing through the bank, your next step is the dealership. You can always get a car loan while on the car lot but beware of the higher interest rates. Usually it can be quite a bit higher than the normal charge for buyers with good credit rating. If you take out a poor credit rating loan with a higher interest rate, it makes sense to go back to the bank after 6 months and request a re-evaluation to get a lower rate loan. If you are making on time payments, which you must always do, you have a great chance of re-financing your loan at a lower interest rate.
Another option is to find a person who is willing to co-sign with your loan. This person is going to guarantee that you are going to pay all your monthly payments on time. If you use this option, be more careful and more responsible because a lot of relationships, whether with family or friends, are destroyed by co-signing a loan.