Bad Credit Is A Downer

Bad Credit Got You Down? You Can Still Secure
A Car Loan With These Tips!

 illustration depicting a red and white triangular road warning about Poor Credit RatingIf you have bad credit hanging over your head, and you are seeking out a car loan, you are likely frustrated with the situation. It is important to remember that bad credit can be many things; some people have bad credit because they had to declare bankruptcy. Others have bad credit because they missed one bill payment for a utility, like the water. If your situation is not as severe as bankruptcy, but a little more complex than simply missing a bill, there are a few things you need to know when it comes to securing a car loan.

1. Bankruptcy

First, if you are dealing with bankruptcy, you will run into a lot of walls wherever you go. The vast majority of lenders do not want to work with you if it has been less than a year since you declared bankruptcy. Therefore, first make sure you know the date that you declared. If you are not sure, request your credit report. Once it has been at least 12 months, you can try and obtain a bad credit loan. You must be prepared to show what you are doing differently to handle your finances. In order to be prepared, you can speak to a lender that works with individuals with bad credit right before the 12 month mark. Find out what they will need from you. Then you will be ready when it is time for you to apply for a loan. It could take a bit of organization on your part.

2. Security

In this case, security does mean protection of sorts. Security is what you will put up against the loan. Typically, bad credit lenders requirepretty girl leaning on car showing the car key some type of security if you ask for several thousand dollars or more. The car you are purchasing is likely to be that security. If you already have a car and simply need a loan to help yourself out of a certain situation, you can use your existing car as security UNLESS that car is already securing another loan. You are only allowed to have a single loan against the vehicle.

If you are asking for less than three thousand dollars, you may not have to provide security. If you do so anyway, however, you could qualify for a lower interest rate.

3. Job

If you want to get a loan, you have to be gainfully employed. Getting money from the government through an aged pension, youth allowance or similar program is not acceptable. A lender will not approve your loan in that situation.

If you do work, you will be in a better position. However, in order to get a bad credit automobile loan, you have to make at least four hundred dollars a week. If not, you will not be approved.

4. Bank Account

If you want to get this type of loan, you have to have a bank account. In general, you must give the last few months of bank statements to a lender that is thinking about working with you. You can prepare by looking through your latest statements with an objective eye. What will a lender think about the information that they see?

A lender wants to look at your statements and see that money is being deposited on a regular basis. They want to see that you are in the black. They do not want to see that money is coming out for a gambling habit. They do not want to see that money is coming out for a loan that you have not told them about. They don’t want to see that your account goes into the negative at all.

Think about it. Why should a lender give you money if your bank history shows that you are still having financial problems? A loan is not going to fix that situation.

5. Research

 loan denied iconIt is not a good idea to fill out as many applications as you can, trying to get someone to approve you for a loan. Do your research. Look at different websites and figure out who you want to apply to. Any lender that is thinking about working with you will run a credit check; if you have applied for multiple loans, that is going to show up on your credit report. The lender is likely to refuse to do business with you if they see that.

Instead, spend time reading through various websites. Pick up the phone and speak to someone at the lending agency to figure out what they are all about. You can tell a lot about them by how they talk to you! After you find a lender that you want to work with, you can apply to them. However, make sure they are your only application.

Good luck!

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