If you are looking to buy a car, there are a lot of factors to consider, price and payment among them. Once you have done all of your test drives and have decided on a model and a color the issue of finding the money to pay for that car, especially if you have bad credit, can be even more of a problem.
Unfortunately, we live in a world where loans are not as easy to come by as they were only a few short years ago and auto loans are no different. If your credit is bad, it may be necessary to take out two loans to finance the car you need, which can damage your credit even further. That is why it is important to consider your payment options now so that you are prepared once you find the right vehicle.
Loan Types and Basic Options
Auto loans are generally what are considered secured loans since the car that you buy with the money is considered the collateral that you use to borrow it. This alone is a major helping factor for those with bad credit. By their very nature, auto loans are secured and therefore warrant a lower interest rate than unsecured personal loans for those with bad credit.
After you establish the type of loan that you can get, the next big factor is down payment. The money that you put down on the car can go a long way in affecting both your interest rate and monthly payments since it means that you ultimately end up borrowing less from the lender. The more money you put down, the better off you will be in terms of rates and repayment.
Where to Get These Loans
Like many loans these days, auto loans for those with poor credit are best secured online. These days there are many lenders available who will be willing to help you purchase a vehicle despite bad credit. You can try to get a loan at an auto dealership from a traditional lender such as a bank or credit union. However it is important to note that with bad credit this will be much harder. Many brick and mortar lenders tend to have tougher qualifications for poor credit loans.
Therefore, looking online is really your best strategy. Generally, to qualify for auto loans you need to have a steady job with a reliable paycheck. Self-employed people cannot qualify. And you also need to be over 18 years of age. You also need to be a UK citizen and have proof of such when filling out your loan application.
Bottom Line: You Can Get a Loan
The really hard part about getting an auto loan with bad credit is already solved here: it is possible. The factors that you need to consider now are what you want and what you can afford. After that, you need to do some research on the varieties of online lenders available and then compare the rates and repayment plans that they offer. Through this comparison shopping you, will be in the best position to get the car you want and need at a price that you can afford, bad credit and all.