3 Qualities to Look For in Poor Credit Car Financing
Your credit is not the best these days. Perhaps you think that will prevent you from financing the purchase of a new or previously owned vehicle. In fact, there are lenders who work specifically with consumers who need some sort of bad credit car finance. As you evaluate an option for finance, pay close attention to these three qualities. Doing so will help you lock in the best deal.
The Interest Rate
Given your current credit score, the interest rate will be a little above the average. What you may not know is that a lender who offers bad credit car loans is still likely to offer rates that are more affordable than you think. That’s because these lenders are more interested in how you are doing now than what led to your lower score a few years back.
The Schedule of Fees and Charges
Make sure you understand every type of feel and charge associated with the loan opportunity. Begin by finding out if you have to pay a fee up front to have an application considered. Move on to whether or not there are loan processing fees, charges for receiving and posting payments, or penalties for paying off your bad credit car finance before the settlement date. Always factor those fees into the total cost of the loan. That will help you see if the deal is as good as it initially looks.
The Amount of the Down Payment
A sizable down payment does mean there is less of the purchase price to finance. Can you get better terms and conditions with the bad credit car finance if you provide a larger down payment? In many cases, the answer is yes. See how much of a difference it makes if you can put down a few more hundred dollars toward the purchase. You may be surprised at how that helps with the interest rate and the amount of the monthly car payment.
Never assume your credit is so poor that financing reliable transportation is out of the question. Talk with a lender who offers loans to those with less than perfect credit. With a little planning, you can find a deal that works for you.
