Due to economic challenges paying our utility bills is not easy and at times we are not able to meet up with our financial obligations. If we miss a credit card payment, this can have a very negative effect on your credit file and compromise your credit score. Your bad credit score becomes obvious when you are to make a major purchase like purchasing a new car. In such situation the best option is to secure a bad credit car loan. A bad credit car loan from AutoLoan Service will enable you to purchase a new car even if you are encountering financial difficulties. There are some few tips to consider before securing a bad credit car loan.
It is paramount to put into consideration the monetary worth of the new car that you want to purchase so as to make sure that you can afford it. Although, a higher bad credit car loan may be given to you but it won’t be easy for you to pay back and this will affect your credit file badly. Hence you need to make proper estimate by evaluating your income and expenditure. Also you need to set aside some amount of money in case of additional expenses that may occur. After all this deduction, then you will know the amount of money left that you can use as payment to offset your loan. Also you need to calculate the cost of fuelling and insurance cost of the new vehicle. The fuelling and insurance cost of the new car should be affordable and this will be helpful to your financial status.
Collect supporting paperwork:
The criteria for securing a loan through a bad credit car dealer are a proof of employment with a minimum of one year and a residential address. The proof of employment is to show that you are financially capable of repaying the loan and that you will be able to maintain the new car that you just acquired. If you are able to provide evidence that you have been employed for over a year and your residential address then you stand a chance of securing a bad credit car loan.
Save a down payment:
When planning to purchase a new car, there is need for adequate preparation which include saving money to use as down payment. This saving could be done within a year. The amount of money that you save and deposited will reduce the amount of loan needed to purchase a new car and it will also prove to the lender that you will be able to repay the loan if granted.
Arrange a co-signer:
A co-signer is a person who acts as a guarantor in case you are not able to pay back your loan. This is a huge financial commitment because if you are not able to pay back the loan, the co-sign will be liable to pay the loan. Some lenders will require that you come with a co-signer to protect their interest in situation where you are unable to meet up with repaying the loan that you took. A person is only qualified to be a co-signer if he/she has a good credit rating and a stable and suitable job. If the co-signer is financially responsible, then the lender will feel safe to give out the loan.