Bad Credit Car Loans
Unless you’re spending cash on a car, you’ll most likely take out a loan to pay for it. If you do take out of a loan, you may wonder if you can get a good loan while having bad credit.
Our team at Pat Peck Honda is here to tell you that it’s certainly possible, if you follow our tips below. Keep reading to learn all about bad credit car loans, then contact us to start shopping for a new automobile near Gulfport, Long Beach, and Biloxi.
How to Get a Loan with Bad Credit
There are several steps to getting a car loan with bad credit. Before you start shopping for a new car, you’ll want to know your credit score. There are several websites that offer free credit reports, and they can also help you understand what factors go into your score. By knowing this number, you can know what kind of loan you’d get and with what interest rate.
Next, you’ll want to create a budget to see what kind of car you can afford to buy. Take a look at your monthly income compared to your usual expenses and see what you have left over. Plus, don’t forget to factor in the cost of gas, insurance, and routine maintenance.
When you have a set budget in mind, you can start vehicle shopping! Then, after picking out your new ride, you can get pre-qualified for a car loan. Many dealerships have a finance application on their website that you can fill out from home. Once that information goes through, a member from their finance center can reach out to discuss your options.
Ways to Improve Your Credit
If your credit score isn’t quite where you want it to be, there are ways you can improve it. These include:
- Paying all your bills on time.
- Getting credit for making utility and cell phone payments on time.
- Keeping balances on credit cards as low as possible.
- Applying for and opening new credit accounts only when needed.
Building credit can take some time. However, doing so can give you a lower interest rate on a loan.
Other Tips for Saving Money on an Auto Loan
If you need a new car right away, you can still get a great loan with your current credit. If the interest rate available to you is a bit high, then opt for a short-term loan. A 3-year car loan would carry a lower interest rate than a 5-year loan, but it’ll equate to higher monthly payments. So, you’ll want to make sure you can afford to make those payments.
You can put a substantial amount down initially (around 20% or so of the car’s total cost) to help lower your monthly payments. You could also try paying off the loan as quickly as possible. By making additional payments when possible, you’ll not only pay off your car loan faster, but you’ll also pay less interest.
If you follow the tips above, then you can get a great new car while having any type of credit.
Start Shopping for a New Automobile Today
At Pat Peck Honda—your buy here, pay here dealership—we want to help drivers like you in Gulfport, Long Beach, and Biloxi drive home in their dream car. So, if you need more information on bad credit car loans, contact our finance center. Then, we’ll help you get started on the buying process as soon as possible!