According to Cars.com, the average price of a new car in 2017 was $30,400 – more than 50% of the median household income in the United States. This means, if you need a car, you probably need a loan, too. Choosing the right lender (especially if you have poor credit) to finance your new vehicle is just as important as finding the right car to take you where you need to go.
Low Credit or No Credit? No Judgment!
If you have poor, limited or no credit history, you can still apply for a loan. Lenders are there to help you through the process of obtaining financing – even with less than desirable credit. Prepare to meet with your lender researching your credit history. USA.gov recommends pulling your credit report from annualcreditreport.com, which allows you to print your credit history four times annually from each credit repository, TransUnion, Equifax and Experian. (Monitor your credit –even if you aren't car shopping; unexpected activity will alert you to identity theft.) These free reports do not include a credit score, but they do show all of your history, so you will see if you have past due accounts or collections that should be cleared up prior to applying for a loan. Your lender might also ask you about any history of late payments. Be prepared to answer these questions honestly and have a plan for repaying all current debt.
If you have poor credit, saving a substantial down payment will also improve your chances of having your loan request approved. Paying cash up front makes your loan less risky for lenders and also shows that you have the financial resolve, budgeting skills and responsibility to save up for a major expense.
Download our free eBook - Absolutely Everything You Need to Know About a Car Loan!
Save with Lower Credit Union Interest Rates
Since credit unions are member-owned, they can typically offer members lower interest rates on loans and higher interest rates on savings accounts than other types of financial institutions. In addition, credit unions also tend to have more flexibility than large financial institutions when it comes to underwriting guidelines and policies.
Find a Credit Union Auto Loan That Works for You
At America's Credit Union, our lending team will work with you to find a loan and a car that fit your lifestyle and your budget. With our online car loan calculator you can try on different auto loans for size based on factors such as the monthly payment amount you can afford, how much money you plan to put down on the purchase, the trade-in value of your current car (if you have one), the loan repayment term and interest rate. This will help you get a better idea of how the car you want to purchase will affect your budget and long term savings goals.
Our loan representatives are always here to help you through the process and answer any questions you might have about applying for a credit union auto loan. Contact us today.
Related: 3 Things You need to Know About How to Get a Car Loan with Bad Credit
