Are you looking for a car loan provider that won’t completely give up on you because of your bad credit history? It’s hard to find a financial institution that is ready to work with you and provide you with enough money to get the car of your dreams.
The first thing that a lender will do is to look into your credit history and check for the errors. Once they find something unusual or troubling, there’s a high chance your application will be declined. That’s why a lot of people address local car sale companies and settle for higher rates than they would normally go for. In both cases, the buyer loses the chance to buy the desired car from a wide selection. 2nd Chance Auto sales provide the buyers with the list of more than 30 lenders currently working in this sector to locals. They help you get the lowest rate and achieve their financial goals.
What you need to know about getting a car loan with bad credit
There are three Cs of lending: Collateral, Capacity, and Character.
- Collateral
Collateral is a security measure for the lender. Every huge lending is based on collaterals that the consumer provides to the lender. The lender then provides a legal document stating that if the consumer won’t be able to pay off the debt, the collateral will go into the lender’s ownership.
In this case, collateral is the vehicle that needs financing in form of the loan. The consumer will buy the vehicle on the money he or she gets from the lender and provides the vehicle as collateral to secure the loan.
- Character
When talking about the character, we are speaking about the type of the bad credit history. We divide them into two profiles:
– Situational
The consumer pays in a timely manner and on a regular basis. But because of the situational circumstances, he/she is forced to delay the payment.
– Habitual
The state when consumer regularly delays the payments and doesn’t pay off the loans. Such credit history is guaranteed to give decline to the application of a car loan. Or if they get the approval, they might have to pay the highest rates.
- Capacity
Capacity speaks about a person’s ability to pay off the debt. It is for determining if the person is able to afford the loan based on current income and expenses.
Is it that hard to get a car loan with bad credit?
To be honest, there’s a slim chance to get a car loan if you have a bad credit history. Look at the criteria listed above. If you were a lender, would you trust someone who’s known for late payments and inability to pay off the debt? The truth is, you wouldn’t. And it seems like your chances are lower than before reading this article. But there are services that let you help pump up your credit score and help you get a car loan with bad credit history.
You’ll be happy to know that there’s still a chance to get your dream car. But for the better results, try building up your credit history for future occasions.
