Need to Find Out How to Get a Car Loan with Bad Credit? [7 Quick Tips]

When you have good credit, qualifying for a car loan is easy. However, if your credit is poor, the situation is more difficult. Fortunately, it is possible to purchase a car even if your credit isn't perfect.  If you're wondering how to get a car loan with bad credit, follow these seven tips.

1. Apply for a preapproval

Before you begin shopping for cars, consider applying for a preapproval so you know that you will be able to secure the loan you need. Applying for a pre-approval also helps you understand how much you can afford to pay for a car.

2. Ask about credit requirements before you apply

Save yourself time by asking about each lender's credit requirements before you apply. If a specific lender has strict credit requirements that you won't meet, save yourself time and stress by applying somewhere else.

3. Pay cash or offer a large down payment

If you aren't able to qualify for a car loan, you can purchase your car by paying cash. In many cases, this will mean that you will need to buy a less expensive car than you originally intended. If you can't afford to pay cash for the full cost of the vehicle, you may find that lenders are more willing to approve your application if you offer a more significant down payment.

4. Consult a credit union for advice

Credit unions have significant insight into how people with poor credit can maximize their chances of qualifying for a loan. After you explain your situation to a credit union, they will be able to answer all your questions and tell you what you can do to get the loan you need.

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5. Apply for a short-term loan

If you are having difficulty qualifying for a standard car loan, you may have better luck applying for a loan with a shorter term. Although a short-term loan may come with a higher payment, the risk to the lender isn't as high, so they are more likely to approve your application. Short-term loans also have lower interest rates than those with longer terms.

6. Shop for lower-priced vehicles

In some cases, you may be able to improve your chances of qualifying for a car loan by shopping for a car with a lower price, or considering a used car. In many cases, lenders that won't approve a loan for a larger amount may be willing to approve a loan for a smaller amount.

7. Raise your credit score

If you don't have enough cash to purchase a car without a loan and you are unable to qualify for a loan from a dealer or another lender, you may have to delay the purchase until you are able to raise your credit score. To raise your credit score, be sure to make all of your payments on time. You can also raise your score by lowering your credit utilization ratio (the amount of outstanding balances on all credit cards divided by the sum of each card's limit, expressed as a percentage).

For most people, a car is a necessity. Fortunately, even if your credit is not at its best, you can improve your chances of getting the car you need with these tips.

Related: Did You Really Just Search 'Bad Credit Car Loan'? We Can Help!