As we all know, credit is an essential tool in allowing us to borrow money at low interest rates for goods, services and investments. Our credit score is measured by a the FICO score and generally speaking anything lower than 680 isn’t considered great but 580 and lower is often considered a bad credit score. If you fall in any of these categories and are on the market for a car, there are options for car loans for people with bad credit.
No matter which option you choose to go with, you’ll have to have a source of consistent income and preferably a cosigner as these lending companies want to ensure they’re paid back their loan no matter what. Even without those requirements, there are some companies that would still offer car loans for people with bad credit. You should also be aware that you likely aren’t going to be driving a new or slightly used vehicle with bad credit.
Be aware that though you have the option of down payment, it’s generally best if you decide to go with one as providing a down payment helps reduce your monthly costs and more importantly, increases your chances of approval significantly. Same goes for the cosigner. Though it’s not necessary, it certainly does help quite a bit with your approval odds. A positive of these car loans is that should you make your monthly payments on time, it can actually help improve your overall credit score as a good payment history impacts the score resulting in lower interest rates.
So what are the next steps” Simple. The 1st is to check your credit score to realistically see what your odds are of getting approved for a car loan. The 2nd is to go with one of our recommended car loan partners below that deal with people with bad credit scores. Follow the steps below to get the best car loans for people with bad credit.