So you need a car loan, and have just discovered that you have bad credit. What do you do now? You don’t have to abandon the hope of getting a vehicle, you just have to know what it takes to get a bad credit auto loan. Let’s take a look.

Be Flexible

How to Get a Bad Credit Auto LoanThe process of getting a car loan when you have bad credit is almost the opposite getting an auto loan when you have good credit. If you already had your heart set on a particular vehicle and were surprised to find out that you have bad credit, don’t give up.

One thing you have to know is that choosing a car comes at the end of the bad credit auto loan process. This is because not all lenders are willing to approve applicants with bad credit. It's much more important for you to find a lender that's willing to work with you at a special finance dealership, rather than a vehicle you want.

You also have to choose a car that fits within the monthly payment range set by a lender. If you're approved for a bad credit auto loan, the lender sets the maximum monthly payment you qualify for, as well as the other terms of the loan. Once the dealer receives those guidelines, they can offer you a selection of vehicles on their lot that fits your car loan budget.

First, though, you need to find a lender that works with credit-challenged consumers, and makes sure you meet the requirements necessary for consideration.

Meet Bad Credit Car Loan Requirements

All lenders have their own set of qualifications you have to meet, but if you need a bad credit auto loan, you usually go through a subprime lender. These lenders work with borrowers who have poor credit, and most of them have similar guidelines to qualify for car loan.

Typically, this means being prepared to show the lender that you have the ability, stability, and willingness to complete an auto loan. To do this, you’re required to bring a number of documents with you to a dealership. These include your most recent check stub, a current utility bill or bank statement, a current landline or contract cell phone bill, and a valid driver’s license.

You also need to provide proof of insurance, and a list of personal references – though you only need these later and they don’t affect an approval decision. What does impact your ability to qualify for a bad credit car loan is a down payment.

A Down Payment Can Help

Down payments show a lender that you’re willing to invest in the success of your loan. Typically, lenders that work with bad credit borrowers require a minimum down payment of at least $1,000 or 10% of a vehicle's selling price. When it comes to a down payment, however, the more you can put down, the better.

Down payments go a long way toward helping you in the long run. When you make a down payment, you lower the cost of your loan, which means you're going to pay less in interest charges over the loan term.

Plus, a large enough down payment can close the gap between the car’s value and what you owe on the loan. The smaller the gap, the less time you spend with negative equity as your vehicle depreciates.

Find a Special Finance Dealership

With everything you should do before you start the process of getting an auto loan, the last thing you need is the stress of trying to find a dealership that can work with your credit. Applying with lender after lender, only to be turned down by those that can't help borrowers with bad credit, just serves to lower your credit score further.

Instead, let Auto Credit Express do the searching for you. We’re teamed up with a nationwide network of special finance dealers that work with the right kind of lenders to help people that are struggling with credit issues. Our service is free, and there's never any obligation. Simply fill out our easy car loan request form, and we'll get to work finding a dealership near you that's ready to help.