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How to Get Bad Credit Car Loans Many people have ended up with bad credit due to the unstable economy. However, just because you have bad credit does not mean all is lost. There are simple things you can do every day to improve your bad credit situation. If you are disciplined and have the willpower, you will find yourself out of a bad credit situation by applying these simple measures. Before and when applying for a bad credit car loan, there are a number of steps you should follow. Applying for a bad credit car loan with reasonable terms will be helpful in building your credit score. Here are the steps to follow before applying for a car loan:
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i) The first step is to get your credit report. The national credit bureaus usually offer the reports for free every once a year.
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ii) To get a reasonable down payment and increase your chances of getting approved for a loan, up your credit score. Improving your credit score will take time but is necessary if you would like an affordable loan. iii) Lenders are more likely to approve your application for a loan if you are employed. Most lenders will require you to have been in employment at the same company for at least three months to qualify for financing. If you are in permanent employment, the lender is also likely to offer you more favorable terms. iv) A reasonably big down payment will go a long way in getting the confidence of the lenders. The down payment usually serves as your commitment to paying back the loan. v)Having bad credit doesn’t mean you are not entitled to shop for the best terms. You can know the best company to sign up with by comparing the rates charged in the market for bad credit car loans. vi) Seek approval for the car loan, preferably from lenders specifically dealing with bad credit cases. Below are the steps to follow when applying for a bad credit car loan: i) Preference should be towards a vehicle with a lower price tag i.e. a used car rather than a new one. This will automatically mean lower monthly payments and a lower loan amount. Lenders are also more likely to approve you for a used car loan rather t than a loan for a new expensive car. ii) Bring along a cosigner that has a good credit history help you with the loan. You will get better loan terms when you have a cosigner with a high credit rating. When your loan is approved, take measures to improve your credit rating by ensuring you pay the installments required on time. If you can, look for an additional job that will bring you more income and make it easier to pay back the loan.