Often poor credit rating is always as a result of failure to stick loan agreement. For instance, one may fail to repay his mortgage loan as agreed. The effect of this is that it will lower your rating thus making it very difficult to secure finance for future purchases. For customers who need car finance with bad credit, some of the tips listed below may be useful.
The first step should be to review the state of your credit. This will help you check for any errors in it that may make it not presentable. In case you find such errors in your report, you need to have them corrected immediately. By having them corrected, your rating will improve and you will have a better chance of getting car loans that are affordable.
You also need to make large initial payments. This means that you will have very little amount remaining for you to borrow which is likely to be affordable. Making large initial payment will also lower your monthly repayments.
Getting a guarantor may also guarantee you car finance even if you had poor rating. This is always an assurance to the lender that one is committed to repaying the loan. The only down side of this method is that it may be difficult to find a guarantor especially if he or she is not a close friend or relative. It should also be noted that defaulting or delay in repayment will always affect your score as well as that of your guarantor.
You also need to compare rates from different lenders. Having a poor rating will obviously mean that you will be charged more than someone whose rating is better, however, you still need to compare rates from at least three lenders before settling on one. This will enable you choose one whose rates are affordable and with better terms.
The type of vehicle you need to buy is another major factor. Because of your financial issues, you may not be awarded a loan that will enable you buy your dream vehicle. You should therefore go for something you can afford bearing your credit rating.
Negotiating the price of the vehicle may also help you. Once you have your car finance with bad credit approved, this should be used to your advantage. This is because lenders find clients with money in place much more attractive than those whose loans have not been approved. This should therefore work to your advantage when it comes to negotiation time with your lender.
The first step should be to review the state of your credit. This will help you check for any errors in it that may make it not presentable. In case you find such errors in your report, you need to have them corrected immediately. By having them corrected, your rating will improve and you will have a better chance of getting car loans that are affordable.
You also need to make large initial payments. This means that you will have very little amount remaining for you to borrow which is likely to be affordable. Making large initial payment will also lower your monthly repayments.
Getting a guarantor may also guarantee you car finance even if you had poor rating. This is always an assurance to the lender that one is committed to repaying the loan. The only down side of this method is that it may be difficult to find a guarantor especially if he or she is not a close friend or relative. It should also be noted that defaulting or delay in repayment will always affect your score as well as that of your guarantor.
You also need to compare rates from different lenders. Having a poor rating will obviously mean that you will be charged more than someone whose rating is better, however, you still need to compare rates from at least three lenders before settling on one. This will enable you choose one whose rates are affordable and with better terms.
The type of vehicle you need to buy is another major factor. Because of your financial issues, you may not be awarded a loan that will enable you buy your dream vehicle. You should therefore go for something you can afford bearing your credit rating.
Negotiating the price of the vehicle may also help you. Once you have your car finance with bad credit approved, this should be used to your advantage. This is because lenders find clients with money in place much more attractive than those whose loans have not been approved. This should therefore work to your advantage when it comes to negotiation time with your lender.
About the Author:
Free report available to read about car finance inverness kilmarnock glasgow irvine written by Joey T Watson which can be found on lease2buy.