If you cannot get approved for an auto loan through a traditional lending source such as a bank, dealership, or credit union, then you’ll probably need to apply for a bad credit car loan. People who need this type of loan typically have a low credit score, low income, a recent bankruptcy, or cannot make a down payment. These bad credit car loans will be funded by the dealer at first, but they will eventually be sold off to a finance company who will handle the loan going forward. In certain cases, a third-party payment processor will handle the loan for the dealership that has the car you want to purchase.
There are certain things that you can do to ensure that you will qualify for a bad credit car loan. You should be able to prove at least $2000 of income every month. Bad credit car loans are usually reserved for residents of the United States of America or Canada. This means that you must prove that you are a legal resident of at least one of these countries. Your driver’s license must be clean and free of warrants or tickets so that you can obtain car insurance. You must prove that you have a source of income or employment that will last for the length of the car loan. Other requirements include a working phone number, a provable permanent residence, and a statement from other sources credit such as a credit card or utility bill.
Certain people will simply not qualify for a bad credit car loan. Anyone who has a seasonal job or temporary employment will not be eligible. If you are applying for one of these car loans and cannot prove your source of income because you are paid in cash, it is likely that you will be denied for a loan. If you have recently had a car repossessed in your name, you will usually be required to make a substantial down payment in order to receive a bad credit car loan. People who are in the military and live outside of North America will not be eligible for one of these car loans.
If you really need a car to get you from one place to another, it is advisable to clear up your credit as much as possible before applying for a bad credit car loan. This is because that this loan is likely your last chance to receive money to buy a car. You want to make sure you do everything that you can to be eligible for such an opportunity. You can clear up your credit by paying off your credit cards, clearing up any judgments that you may have, and making sure that you pay your bills on time every month.
A bad credit car loan is the golden opportunity that you need to get yourself a reliable car. If you are able to stay on top of your payments, it can also serve to improve your credit for the future!