Waiting for approval on a loan when you have bad credit can be an anxiety-ridden event. Bas credit can mean having high-interest rates and have issues with getting approved in general. But if you need a new car, you may have to go through the process of getting a bad credit auto loan regardless of the high stakes. Because of your current credit status, here are three odd, yet important things that you need to do when you get an auto loan.
1. Keep your old car
Though you may be interested in using your old car as a trade-in, there is a good reason to keep your vehicle. If your old car is still running and in pretty good shape, you should keep it instead of trading it in. Although you will need to have money for the down payment in lieu of the trade-in, you should keep your old car in case you have financial trouble later on. If you lose your job and are unable to make payments on your new car, you can sell the new vehicle without having to worry about finding new transportation. Keeping your old car is a good financial move.
2. Base your acceptance on the monthly payment amount
If you have had credit troubles in the past because the payments on your monthly obligations became too much, it is best to accept terms based on monthly payment. A lower monthly payment, even with a slightly higher interest rate, gives you some breathing room if your finances get a little tight. Since a car loan that is paid on time will help your credit, you want to make sure that you always get the vehicle paid each month. A lower payment amount will ensure you can manage the car payments and possibly make extra payments if you get a raise or a bonus.
3. Get a popular car
When purchasing a car, you definitely want to get a vehicle that you enjoy riding in and a car that is reliable. If you are looking for a bad credit auto loan, you will also need to go with a car that is a popular purchase. The reason for this is that the car will be easy to trade in or sell if you need to get from under your car loan quickly. A popular car or a luxury car that people often purchase will mean your search for a buyer is faster, and you don't run into any more financial problems.
For more information on bad credit auto loans, contact your local dealership.Share