Getting a new car is exciting, but when you really don’t have the right credit rating you might feel like it’s impossible to move in this direction. However, the good news that you need to hear right here and right now is that it’s quite possible to get the lifestyle that you want — including getting the car that you want. You just need to find the right type of car loan.
Can you really get a car loan with bad credit? Absolutely — but there are some restrictions that you need to know about. First and foremost, you should understand that a car loan designed for people with bad credit isn’t going to be cheap. You’re going to be paying a lot more than someone that doesn’t have bad credit for the simple fact that you have a higher risk of default than someone that doesn’t have bad credit. That might not seem fair, but the lender isn’t thinking about your interests first and foremost. They are thinking about their bottom line and the costs that would be involved in trying to collect the debt from you.
What you need to do from here to make sure that you’re going to be able to afford the extra costs. Don’t try to get a car loan without at least running the raw figures through a car loan calculator. You should look up what the average for bad credit car loans are running in your area and then use the top most figures in your interest calculations. This will help you get a monthly payment estimation. It’s not going to be completely accurate, but it is going to be something that you can use for your own needs in budgeting.
You will also want to try to get the cheapest car possible. Yes, we know that you’re going to be pretty tempted to get a more expensive car because you now have car financing but that’s really not the best way to go. It would be a lot wiser to make sure that you can actually get the car without having to give it up. That’s something that you don’t want to go through — going through all of the process to get the car in your driveway, only to have to give the car back later. That just wouldn’t be good — it actually damages your credit worse.
Make sure that you get as much documentation as possible for your upcoming car loan. The lender is going to want to make absolutely sure that you have enough money to handle the car payment. Keep in mind that you will also have to raise your insurance levels to handle the car loan as well — work that into your budget to make sure that the car is still a good purchase!