10 Tips on Getting a Car Loan With Bad Credit at eZerk

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10 Tips on Getting a Car Loan With Bad Credit

Published by admin February 15th, 2008 in Business/Finance, Loans and Auto Loans.

1. Improve Your Credit
Even if you have bad credit, every day is a new day to repairing your credit. Before you apply for a loan make all of your payments on time for all of your outstanding debts and it will help your credit score to increase. If there are negative or inaccurate items on your credit report take some time to get these items taken care of and removed.

2. Shop Around
Just because you have bad credit does not mean that you shouldn’t shop and compare your financing options. While you may have a harder time or have to pay a higher rate than good credit borrowers, you still have options, so find out what they are.

3. Bring Other Backup
While credit history does play a role in most financing approvals, it is not the only piece of the puzzle. Many lenders do take other factors into consideration, such as employment history and monthly income. So when you are going to obtain financing bring documentation with you that proves how long you have been working with your current employer, what your monthly income is, or other positive documentation that shows you are on the road to better credit.

4. Go to a Niche Lender
Every lender caters to a particular type of borrower. There are lenders that specialize in lending to individuals with bad credit. Check into these types of lenders to see what kind of financing options are available to you so that you can compare them with other offers that you receive.

5. Put More Money Down
The more cash down payment you can make on a car the less financing you will need to obtain. Often times this will help borrowers to be able to obtain financing easier. This is because the borrower is seen as less of a risk to the lender because the borrower has more invested in the auto upfront.

6. Get a Co-signor
Having a co-signor for your auto loan can help you get on the right track. This will allow you to obtain reasonable terms and rates on your auto loan and rebuild your credit at the same time.

7. Past Auto Loan History
Even if you have bad payment history with other types of loans, if you have good payment history on previous auto loans be sure to bring documentation that shows your good payment auto loan history to show the lender.

8. Explain Your Situation
Everyone makes mistakes sometimes. Sometimes these mistakes affect our credit. If you have a plausible reason for your bad credit history some lenders will ask you to explain the situation in writing and will accept it as a means to give you another chance.

9. Current Lenders
Talk to a lender that you already have other types of loans. For example, if your home mortgage and student loan are with your local bank find out if they offer auto loans. Provided that you have a positive payment history on your other loans, they may be willing to also lend you money to buy a car.

10. No Credit Check Lenders 
Check into lenders that do not require a credit check. You may pay a slightly higher rate than those lenders that require credit checks, but these lenders will lend on other factors besides your credit score and payment history.


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