When you set out to buy a new car, your credit rating will be a significant part of the financing approval process. Having bad credit alone does not necessarily mean you can’t buy or lease a car. However, when it comes to bad credit car buying, you may have to adjust your game plan to get approved. If you need a car but lack the credit needed to qualify for an auto loan – not to fear, ScoreShuttle is here with the following guide to help you get the green-light.
Tips to Increase Your Auto Loan Approval Chances
Bad credit doesn’t mean you will never get approved for an auto loan. By the same token, it will likely add some hurdles to your car buying journey. Here are a few tips to consider that may help you increase your loan approval chances.
Demonstrate Stable Employment and Income
Even though credit is one of the largest factors lenders consider when determining auto loan approval, having stable employment will also play a role. By demonstrating current employment and a steady income, you can show lenders that you are financially able to make your payments – which could help your chances of getting approved.
Have a Big Down Payment Ready
In lieu of great credit, a big down payment can also help you increase your odds of getting approved for an auto loan. In fact, a large down payment not only can help you increase your chances of receiving approval, depending on the severity of your credit, it may be necessary for some lenders to consider moving forward.
Get Pre-Approved Before you Shop
Before you shop for your dream ride, it’s wise to get pre-approved for an auto loan in general. Pre-approval can simplify the selection process and help prevent surprise declines and credit-based up charges on the back end.
Use Caution with Buy Here, Pay Here Car Lots
There are car lots that offer customers on-site financing with less stringent qualifications. These lots often wave a credit check before approving a car loan, which can be helpful in a pinch. However, some lots may over-price their vehicles and could sell poor-quality cars. If you think you are dealing with this type of car lot, it may be wise to have the vehicle checked by a mechanic before signing the purchase papers.
Plan for High-Interest Rates and Less Than Favorable Loan Terms
Even if your bad credit car buying journey leads to auto loan approval, it will likely come at a cost. Without the assurance of the excellent credit, lenders may throw in high-interest rates and less than favorable loan terms. With this mind, you may need to plan for pricey term conditions.
How to Guarantee Auto Loan Approval and Get the Best Deal Possible
The best way to guarantee auto loan approval and get a great deal is to ensure that your financial portfolio is equipped to handle the purchase. This includes a low debt-to-income-ratio, a stable monthly income, and yes – excellent credit. Even though bad credit car buying is possible, it likely won’t lead to a good deal. By taking the steps to improve your credit now, you can drastically increase your chances of getting loan approval for the car you want. A high credit score can also improve your chances of receiving more favorable loan terms such as a low APR and fewer fees. If you’re looking to rev up your credit before you buy, you can access the online tools in ScoreShuttle to drive yourself into a more favorable credit category. To start your credit-enhancing engine, click below.
Disclaimer: ScoreShuttle is not a lending firm and does not provide or guarantee auto loan approval. Always be sure to do your own research before making an auto purchase.