subject: How To Get A Car Loan With Bad Credit Rating [print this page] You feel down because you just learned that your application for a car loan had been denied and the reason behind this is the bad credit score you have. It doesnt sound good because you feel you are branded as very lousy borrower. This doesnt mean that your borrowing days are over, it would still possible for you to get be able to have a car of your own. Since most new car loan needs collateral, most car lenders approve the car loan even if the person has bad credit.
Getting bad credit car finance has its pros and cons. The major disadvantage is the high interest rate for your car loan. However, there are ways for a person to get his loan approved. In fact, there are lenders who specialize in giving loans to those with bad credit score. However, there is usually a catch, you will be given higher interest rate, a lot higher that those who have good credit standing.
You can get car loan finance if you have a co-borrower or a co-signer. But for the loan to be approved, your co-borrower must have a strong credit history. This will also lower your rate because they will be held liable if ever you are unable to make payments. Additionally, your loan has a great chance of getting approved if you apply for a down payment which is usually 10%. Once you make a down payment, even if it does not lower your interest rate, it will lower the amount of your bad credit car loan. This will result in more affordable payment plan.
Getting a good credit score from the nightmare of having a bad credit does not happen overnight. However, if your regularly show that your are serious with your loan, it will improve your credit rating. This will entail paying your loan on time, paying down your credit cards and settlement of all your past due and other payables. With proper management of all your bills and pay strict attention to all your credits, you will quickly recover as being branded with a low credit score or a bad borrower. You have to check your credit annually and continue paying more for your car loan. In two years time and your credit score has improved, you may be able to ask for a much lower rate on your personal car loan.
