By FinanceBuddy Staff Writer
It isn't that difficult to find an auto loan if you have bad credit, but it is hard to find a loan without extremely high interest rates, which means you have to do a lot of legwork and shopping around. Having bad credit history and a low FICO credit score can create problems when trying to buy or lease a car. People with serious credit issues may have very frustrating experiences when searching for car loans, especially in times of tight credit or when the economy isn't doing very well.
Usually, people with bad credit should expect to pay higher interest rates. They also have to make higher down payments or a security deposit if they are leasing. If you have bad credit make sure you at least have a good history of car payments because this can help show car loaners that you will pay this back. If your credit history is bad, you can still get a car loan but you will need to find lenders who specialize in sub-prime or bad credit loans. You can find these from associated finance companies or you can get your own pre-approved loan online. You may want to get your car and car loan at the same place. A lot of times used car dealerships have their own loans they can give out. They are a dealership and can usually get a car for practically anyone regardless of any credit issues.
If you can't get approved for a loan, it isn't the end of the world. You can save cash and buy a cheap car and trade up when your credit improves. You can borrow a car, or find a used car from an individual who will accept a payment plan. If you want to get approved for a loan, you can get a co-signer. This is someone who will be responsible for the loan in the case that you don't make payments.