Credit challenged car buyers can save themselves both time and aggravation by following a few simple steps
Four Steps to Prepare for a Bad Credit Car Loan
Here at Auto Credit Express we've spent more than two decades helping borrowers with credit issues re-establish themselves with a subprime car loan. The time we've spent with bad credit buyers has led us to conclude that following these tips can make the loan process move more quickly and make it easier on everyone involved – borrowers, lenders and dealership employees working to get those loans approved.
- Have your down payment ready – most high-risk lenders require a minimum down payment of 10% or $1,000, whichever is less. But the fact of the matter is that having more than the minimum amount can often increase the chances of a loan approval. Not only that, the larger the down payment, the lower the monthly payment (as well as the interest charges on the loan).
- Have your documentation ready – most subprime lenders or dealerships that offer bad credit car loans require proof of income (W-2 forms, pay stubs and sometimes even bank statements and income tax returns), proof of residency (electric bill, gas bill, water bill, mortgage statement and lease agreement) as well as a list of references (4-6 friends, family members or co-workers with addresses and phone numbers – be sure to tell them as they may be contacted by the lender).
- Be flexible with vehicle selection – be willing to work with the dealership and the lender when it comes time to pick out a vehicle. It probably won't be your dream car, but choosing a subcompact or compact car and financing it, ideally, for no more than 48 months will allow you to trade out of it sooner and, if you've kept up on your payments as well as the rest of your bills, you should be able to trade out of it within 2 years for a better vehicle at a lower interest rate.
- Tell the truth on your application – we've said it before and we'll say it again: now is not the time to begin a career in "creative writing."
The Bottom Line
A little preparation up front can save a lot of exasperation in the long run when it comes to applying for a subprime car loan.
One more tip: Auto Credit Express helps applicants that have experienced car credit problems find those dealers that can give them their best chances for a car loan approval.
So if you're ready to take that first step in reestablishing your auto credit, you can begin now by filling out our online car loan application.