Banks are often the first place people go to when planning to go for car financing, but banks are unreliable partners when it comes to car loans for people with bad credit. Banks depend on an individual’s credit score when deciding whether to approve or decline a loan. And for those with a negative score, the answer is almost always a ‘no’.
However, the good news is that banks are actually not the only resource when it comes to car loans. If your credit standing is a bit shaky and you need a car loan fast, banks are not the place you should be looking at. Below, we list down some options to steer you to the correct direction:
- Company financing
There are some companies and businesses that offer car financing to their employees, and you might have the said option in your place of work. The good thing about this is that most companies charge very little interest on car loans for their employees. If you are not sure whether there’s an offer in your company, go ahead and ask. Even if there’s none, if you’re at the right position, an available offer might just come up for you.
- Credit union
It would be better if you are already a member of one, as applying for a loan would be easier. However, even if you’re not, you can approach a credit union in your local community to ask for their loan options. The rates are generally reasonable, and they will be looking at other factors when evaluating your application instead of focusing solely on your credit score.
- Other financial institutions
These can include banks, but not only… Non-profit lenders, online lenders—these are just some other avenues that you can look into. Choose those that specialize or focus on car financing vs those that have a general market. When it comes to banks, try local banks instead of national banks. They are likely to have less stringent criteria when considering car loans involving people with bad credit.
- Bad credit dealerships
Some car dealerships specialize in cases that involve bad credit. The advantage here is that they almost always guarantee approval of your car loan. The disadvantage: there are some shady dealerships that offer unreasonable programs that victimize innocent clients. If you are thinking about going for a car financing via dealerships specializing in car loans for people with bad credit, you need to do the right amount of research to determine whether the institution you’re considering is one that’s legitimate and reliable. Look for reviews, possible complaints, and use the internet to do background research.
Getting a car loan if you have bad credit shouldn’t be too difficult if you know where to look and how to approach the situation correctly. Just don’t forget to start rebuilding your credit the moment you’re approved for your loan. This is the best time to turn things around in your credit standing.