What Are the Benefits of Bad Credit Car Loans?
How beneficial are bad credit auto loans? Are they worth your time? Let’s find out;
On-time payments can help repair credit history
Taking out a bad credit car loan and repaying your debt within the repayment window can help repair your credit history. But, that’s only if your lender reports payments to the three major credit bureaus. You might want to make this consideration when choosing a lender.
Little attention is given to your credit score
Imagine a loan offer without the credit score requirement. Awesome right? That’s what you get with bad credit auto loans. Bad credit car loan lenders consider you for a loan even if you have a bad credit rating.
There are no restrictions
This means you’re able to drive your car anywhere and everywhere. The lenders don’t prohibit you from using your car since it’s technically yours. However, the car is not to be sold or damaged in any way within the loan term — as it should be.
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Get StartedTypes of Bad Credit Car Loans
Here are the known types of bad credit car loans;
Bank and Credit Unions
Banks are usually ready to help you if your account with them has an appreciable standing. A bank account with good standing is one with regular deposits and a positive balance at least once a month. Credit union loans are a viable option too. But, most times, you must be a member of the credit union to qualify for a loan.
Car Retailers
Car retailers both online and offline provide some form of financing for bad credit borrowers who don’t have the purchasing power to get their desired car. However, for online retailers like Carvana, you must choose the car from the website. The prices are usually non-negotiable and the retailer accepts trade-ins too.
Car Dealership
Car dealerships that have good relationships with direct lenders like banks and credit unions have the flexibility to grant loans that'll favor both lender and borrower. They take a flat fee or a percentage of the purchase as their commission. Some other dealers may have their own financing options for customers.
Online lenders or brokers
Another good way to access multiple lenders at a time is to try out an online broker. An online broker can connect you with the best offers at the moment. One prominent one, US Installment Loans, does this at no extra cost, that is, you don’t pay for the service. They can connect you to lenders that can offer you personal loans up to $35000 to finance your car dream.
Comparing Bad Credit Auto Lenders
To get the best offer, you may have to draw a list of lenders and compare what they have in store for applicants. Check these lenders out. You never know what you might find.
For instance, having a co-signer gives a bad credit car loan lender extra assurance that you’d repay your loan. If you feel like you need one, check if the lender allows co-signers. If they don’t, get a broker to help you find one that does.
Secondly, If you’re looking to build your credit score with your car loan, it would make sense to check whether or not your lender reports your on-time loan payments to any of the three major credit bureaus. If they do, then your repayment record will be made available for lenders in the future.
Another good way to get the best lender would be to compare their interest rates. To do this, get their interest rate from the quote, find an online loan calculator and figure out how each lender’s interest rate affects your monthly budget as well as the total loan cost.
How to Increase Your Chances of Getting Approved for Bad Credit Car Loans?
If your most recent application for a car loan was rejected, you could try paying off a few debts or try these tips to increase your chances of getting approved next time you apply for a car loan;
Look up your score
Before giving up, take a look at your credit score and see if you can increase it. You can start by paying off small debts and increasing your credit limit. After getting your FICO to score up a few points, re-apply for the loan. You may even check for errors and report these errors if any. Making these corrections can improve your credit score by a few points.
Apply to multiple lenders directly
This shouldn’t be much of a problem if you use a loan broker. In one application with a loan broker, you get access to tens of lenders ready to help out bad credit car loan borrowers. You can rest assured that you get multiple affordable offers a few minutes after application.
Find a cosigner
Why not find a cosigner? A cosigner can be considered as someone who settles the loan in your stead should something happen and you’re incapable of settling in time. It’s crucial that your cosigner should be someone you can trust, perhaps, a family member or close friend. Also, make sure the person has good credit, so your chances of approval are even higher.
How US Installment Loans Can Help With Your Car Financing
US Installment Loans is an online loan broker dedicated to helping grant people with bad or good credit scores access to lenders who offer affordable loans with reasonable repayment windows and T&C.
They currently partner with over 150 reputable lenders and would be glad to help you with an affordable personal loan for your car financing. Even if you have bad credit.
To apply for the loan, just select the amount you want to borrow to begin the loan request process. Then, you’d be redirected to another page requiring some information about you. Follow the prompts, and provide as much information as is needed, including your biodata, personal, and a little information on your financial standing.
In a few minutes, you’d be presented with offers from various lenders interested in granting your loan request. Check their interest rates, fees, eligibility requirements, extra fees, loan terms, and T&C, to help you know which is best for you.
After getting your ideal lender, accept their offer by signing it and wait for the cash to come in. Very easy!
How Does US Installment Loans Compare?
 | Why Us | |
|---|---|---|
| How much do I qualify for? | Up to $35000 | Competitive rates |
| What's the max loan length? | Up to 36 months | Fast decisions |
| Do lenders check my credit? | Yes | Soft credit checks |
| All credit levels accepted? | Yes | Bad credit doesn't matter |
| Chances of approval | Good | High approval rates |
| When am I allowed to apply? | 24/7 online | Easy application |
FAQs
What Information is required to apply for auto loans for bad credit?
Here’s what you need when applying for an auto loan for bad credit right now: proof of income, proof of residence, proof of insurance (could be any type), a government-issued ID, and vehicle information. Make sure to have these ready upon request.
Can I get bad credit car loans if I have a 500 credit score?
Yes, you can. However, the interest on the loan can be a little higher than what it would have been if you had a stellar credit score. That’s not to say you should patronize predatory lenders and their extra-high interest rates. US Installment Loans can connect you with lenders with competitively low-interest rates.
Will a bad credit auto loan impact my credit score?
Yes, a bad credit auto loan can impact your credit score. Your credit score can see some improvement if your lender reports payments to the major credit bureaus. It may also see a little decrease if hard credit inquiries are run on your profile at the time of application. So, you should aim to work with lenders who run only soft credit checks and report payments to the major credit bureaus.