Do you need a bad credit car loan?
Are you looking at buying the car of your dreams but you don’t have enough cash to pay for it? Do you feel even worse than you have a bad credit history and that it might be used against you for the car loan you want to apply for? Most lenders are a bit reluctant when it comes to loaning money to people with bad credit history. Their history could indicate their reliability to pay off the loan they’re applying for. However, this is not the end of the road for those who have bad credit.
In fact, there are a number of lending companies who want to give these people a second chance. And this pretty much means that your dream car could be yours sooner than you expect. Yes, it is true. Getting a car loan even with bad credit is possible, provided that you are able to provide all the requirements that the lenders will ask. These documents will help them assess your financial status at the moment and whether or not you are worthy of a second chance at loans.
Why do people get bad credit?
People who have bad credit are not bad people. In fact, they are as hardworking as the others who have a good credit rating. Some of them might have overestimated their capacity to pay off loans, so they ended up spending more than what they are earning. And then there are also those who become victims of circumstances. An illness or death in the family could also be reasons for a sudden change in one’s financial situation. Whatever the reasons may be, having bad credit now does not mean having it forever.
Sometimes, having bad credit teaches you the most important lessons in financial planning. Knowing how much you are earning and comparing it to how much you are spending is always the first step. When you know your financial capacity to make purchases, it puts your spending in a different light. In some situations, having bad credit at the moment might also be a good reminder that you have spent way more than you should have. It might be the wake-up call that you need to get it together.
Is it possible to get a car loan despite bad credit?
Did you know that most people with bad credit submit the same loan application over and over again? Despite the poor quality of the application, these people remain hopeful that they’d be given a second chance. Unfortunately, lending companies are looking at other good reasons to approve of the loan. Unless you know what other proof you need to submit, your application for that car loan will remain pending.
Why should you be given than car loan approval? At ApprovalBuddy, we make sure that you understand that having a bad credit rating is not the end of your plans to buy a car through a car loan. Here is a list of tips to help you get a positive remark from potential lenders:
Be completely honest
It is important to be completely honest when it comes to loan applications. Fill in your application with a list of all your existing credit. If you think you can get away with it, you are wrong. These financial institutions and lenders will look into your credit history. The moment they find out that you are lying, you will lose the opportunity at getting a second chance. Failing to disclose the status of your loan with a former lender could put all the red flags up. Your application for a loan will be denied.
Honesty is where it all begins. Leaving out relevant information thinking it might cause you more harm than good could make your status even worse. Full disclosure should always be your goal. Make complete statements and allow potentials lenders to help you get that good start.
Learn more about your credit history
Before submitting any applications for a car loan, it is important that you know where your finances stand in terms of credit. Did you know that you can access your credit file online? It has become more accessible to those who want to know the status of the loans that they have. If there are entries there that you don’t understand, it is easier to contact the company to get further information. Being prepared, complete and up-front with potential lenders will help build your confidence.
Prepare your bank documents.
You also have to prepare your bank records as these are essential in establishing your capacity to pay off the loan. Financial institutions will carefully review your bank statements. It is important that the statements show that you are living within your means and that’s because you can save money regularly. It doesn’t matter how much you are able to save in a week. Savings means extra money. It will demonstrate that you have extra cash to pay off a loan on a regular basis after you have covered your living expenses.
Work on cleaning your credit card payment history.
You don’t have to pay off the existing loan to be able to apply for a new one. In fact, having existing loans including the ones through your credit card helps financial institutions to evaluate your capacity to apply and pay off a loan. Your payment history with your credit card company helps identify you as a good payor. Make sure to pay more than the minimum payment required as this also helps establish that you are more than willing to pay off the loans you have at the moment. The recent history of credit is not a problem at all. In fact, if you are consistently paying these, your car loan application will be reviewed favorably.
Make sure to have a job when you apply.
Your employment will be your source of steady income and that is important to reassure a potential financier that the investment they will put on your application will be worth it. Employment also means financial stability on your end. A solid employment history will get your application moving faster. You can earn this when you have worked for the same company for three years or more. Being with the same company means being stable and that makes all the difference in your application. Although having many employers within a span of time may also be good. It is a reflection of your continued search for a more stable job.
How can I speed up the application process?
This is where we come in. at your convenience, ApprovalBuddy will help your process your car loan application. Even with bad credit history, we can lead you to potential car loan lenders that could give you the second chance that you need to loan. We can help you put together an application that will put your finances in a good light.