One of the most significant purchases that you will make in life - aside from a house is your car. It’s going to get you to visit friends and family, to drop the kids off at school - there are a lot of ways that a car can be the best thing that you ever purchase, but the problem is your credit rating. Owning a car is a priority for many people, but if your credit is less than perfect, you may run into some roadblocks. Your credit score says a lot about you, and if you have a low rating, you could be in for a shock when you apply for a car on finance.

The combination of bad credit and rising interest rates can be lethal for your budget, especially if you are worried that your credit score is going to impact your chances. The good news is that you do have options and all is not lost. You deserve to have the very best when it comes to the necessity that is a car, so let’s take a look at how you can qualify for a car loan when you have bad credit. Bad credit doesn't mean it’s out of reach for you; you just have to look at things differently. Let’s take a look at how you can get that much-needed car loan!

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Wait To Shop

Before you head out to find new deals on a car, pause. Get your credit report and check out what’s on it. This way, you can start paying back some debts, upping your credit rating bit by bit. When you do this, you get the chance to dispute errors in your report, too, which will help you to clean it up further. This will result in you getting the car that you want at the best possible deal.

Find A Great Lender

Lenders always base their decision on the opinion of a computer. It’s hard to find a lender that will deal with your bad credit and look at your current circumstances favorably. For most, bad credit is a red flag that you won’t pay for your car - even if the bad credit is years old.

The good news here is that there are lenders out there that specialize in bad credit car loans. They’ll be able to walk you through your options, give you the correct advice and negotiate with you.

Buy On Terms - Not Monthly Payments

One of the traps that most bad credit customers fall into is looking at the lower monthly repayments. They’re seeing a couple of hundred dollars a month and believing that it’s a great deal. However, if the terms of the agreement aren’t great, you are going to pay out more over time. For example, most bad credit car loans come with a much higher APR. Instead of being stung by that, look for the terms that have a shorter period of time or a better APR. Looking at the terms first is important, as it details your commitment.

Pre-Approval Is A Good Idea

Before you go and fall in love with a brand new set of wheels, get your car loan pre-approved first. The danger of doing it the other way around can mean that you’re not going to get that car in the end, and you could have avoided a lot of disappointment. By the end of the pre-approval, you’ll know how much money you’re approved for, which can determine your budget. It’s a smart idea to do this, as it will help you to decide whether you clean up your credit first, too.

Save Hard

You may not be in a position to buy the entire car outright, even if you do save, but that doesn't mean that you can’t have a bigger down-payment to reduce your overall monthly payments. When you increase your down payment, you can take down the interest, tax, fees and even the cost of the car itself. As well as that, it’ll give you more car choices, too, which is always a bonus!

No Two Cars Are Made Equal

Did you know that loan companies are going to treat cars differently? Loan agencies will not view all of your cars in the same way. They think about the history of the vehicle, the age of the vehicle, the mileage - it’s all relevant to your application.

Don’t Default

The chances are that your credit is low because you missed payments or paid late every month for other items on credit. So, the best thing that you can do for yourself if you are approved for a car loan with bad credit is to be on time. Set up the payments to go out automatically if necessary, and don’t be afraid to speak to the company if your circumstances change during the payments. It’s better to be on time as much as possible, and honest about when you can’t be.

Ask Someone To Help

Some bad credit finance companies will ask you to have a cosigner to sign off on the loan with you. It can increase your chances of a loan at a good rate, and they give your finance company additional security that you’ll pay on time. No one wants to leave their cosigner to pay their bills for them!

In the end, it may feel impossible to get that car loan with bad credit, but it can happen. Pay attention to where you’re looking for help, and don't do anything that could continue to lower your credit further. Shop around, do your research and make sure that you have your budget sorted before you even look at the cars that you may want. Compare your options with different car companies, and choose the loan that matches your circumstances. Keep a cosigner as a back-up option in case you don’t get the help that you want, but just bear in mind your situation. Your bad credit may be from years ago, but if you’re still struggling now, is it a good idea to saddle yourself with further debt? Be honest with yourself and shop carefully - you CAN qualify for a car loan with bad credit!