If you just searched "bad credit car loan," you're probably looking for some help in getting the loan that you need -- in spite of some credit issues in your past. The first thing to know is you’re not alone. Around 14% of people don’t have a credit score at all. Many people are dealing with low credit, poor credit, no credit, or a credit rebuilding journey, so many lenders are now making an effort to work with those who may need some extra help in getting approved. Here's what you need to know when trying to get a bad credit car loan.
Finding the Right Lender
It's important to find a lender who you can trust. If you have a relationship established with a credit union or other banking institution already, it's usually best to start there. Use tools like online loan calculators to help you get an idea of what kind of loan you can get based on how much you can afford to pay each month.
You can also rely on the finance department at the car dealership -- but you're likely to find that the dealership doesn't offer you the same kind of personalized service that your own credit union will. If you don't have a relationship with a credit union already, you can still get a good feel for what type of loans might potentially be available to you by speaking with a representative either in person or by phone.
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What You Need to Qualify
What you'll need to qualify for the new car loan will vary based on your lender. However, among the majority of auto loan lenders, you'll need to have the following to qualify.
Proof of income- Proof of residence
- Proof of insurance
- Valid driver's license
Although it's not always required, the vast majority of new car loans with bad credit do require a down payment. The exact amount of the down payment will vary by lender. Some lenders require a flat amount while others require a down payment that is based upon a percentage of the total purchase price of the car.
Some bad credit car loan providers also require a bank account, usually a checking account. If this is the case, you'll need to bring a blank check along when you sign the loan paperwork. The payments may be debited from the account automatically, if required by the lender.
Ready to Get Your New Car Loan?
Even if you're struggling with bad credit, slow credit, or no credit, it's entirely possible to get the new car that you want and need. There's also more good news: As you make your car payments over the coming years, your credit score will reap the benefits. By the time you pay off this car loan, you could have good credit.
America's Credit Union is here to help with your next car loan. Feel free to use our free Car Loan Calculator online anytime, or contact us for help today.
Related: 8 Tips to Help You Choose a Credit Union Auto Loan
