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Steps To Help You Find Bad Credit Car Loan

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Having a not so stellar credit score does not mean you can no longer buy a car, and

it does not automatically exclude you from car financing with fair rates. Also,

reports reveal that nowadays many people with bad scores are getting approved, so

you just might secure that car you want after all.

Here are tips to help you get that bad credit auto loans with terms that will not

break your monthly budget.

Don’t think that you don’t qualify

for a car loan

One lender may say that your credit is

poor. But in the lending community,

“bad” is a matter of opinion and

degree. Secure your free credit reports

and pay a small amount of money to

figure out your credit score. Even if your score isn't that good, it is likely that you

have a better chance of getting a loan than an individual with the same score. This

is because loan companies make use of different criteria, so one company may see

you as a good potential client while others will feel that you are too great a risk to

take. That’s where shopping for auto loans becomes crucial.

Look for car financing firms

Besides banks, check other sources for car financing. Examples of these are credit

unions as well as internet-based lenders. Also, see if your employer or insurance

carrier offers vehicle financing. Be aware though that it isn't generally a good idea

to borrow from loan providers that cater mainly to subprime customers.

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Look into loan terms, not merely monthly payments

You will have bigger savings by obtaining a loan with the smallest APR over the

shortest period as opposed to one with more affordable monthly payments but will

last several years.

Watch out for extras

Some firms providing bad credit auto

loans stuff their contracts with products

or services you have no actual need for.

Obviously, these will add unnecessary

costs. If the lending company insists that

you get extended warranties, after

market services and insurance prior to getting the loan, look for another lender.

Be cautious about yo-yo sales strategies

Some dealers permit you to drive home the car you want while they facilitate the

financing. But driving the vehicle home when the loan is still not final can turn out

to be a bad idea because some dealers will contact you and say that the deal cannot

be finalized as first agreed. They will direct you to either return the car or agree to

financing with pricier terms. This is called a yo-yo sale, and you can find yourself

paying an interest rate that is five percent more than what you previously

consented to.