Poor economic situation has caused terrible depreciation and significant job losses. However, in many communities cars remain an essential thing to have. Unfortunately, in a bad economy, it is still possible to find people who have poor credit score. This can represent a problem for people who need cars to go to work, especially if their home is far from primary public transportation facilities. In fact, car is a requirement for having a job, because even in a highly developed urban area, not all houses are covered by public transportation. Unfortunately, there is a possibility that bad credit will affect our car loan. It is possible that we will face rejection due to bad credit. Fortunately, there are things we can do to improve strategies related to car loans. However, we should be aware of offers that say “guaranteed instant approval” or something similar. In general, although it is possible for us to get car loan with bad credit score, but we should avoid offers that promise us something unrealistic, such as instant approval.
These instant-approval loan providers are usually available only through online channels and this is a good opportunity for them to target car consumers who are increasingly desperate due to repeated rejection. Although some lenders agree to provide us with car loans even if we have poor credit scores, they will still examine other factors that can compensate for our bad credit records. As an example, we could still have some significant collateral that can allow us to apply for car loans. Lenders could also ask us for employment details and if we have sufficient salary, this will be a good thing. In this case, lenders could assign us to work with specific car dealers. It is quite likely that lenders have formed a kind of cooperation with car dealers and they receive some commission for each car buyer. This may sound like a bad thing in normal situation, but in this case, we may not have a choice. As long as the commission doesn’t significantly increase the basic price of the car, we should consider it as acceptable.
One essential thing that allows us to obtain car loan despite our poor credit score, is if we agree to provide some amount of down payment. By doing so, we will be able to convince lenders that we are financially more capable than what is represented by the credit score. Down payment should increase the willingness of lenders to provide us with car loan. With down payment, lenders face lower risk and they have more faith in our application. For this reason, we should make sure that network has properly reviewed our auto loan application and we could submit our personal information properly. We should provide lenders with enough financial details, such as monthly salary, available assets, equity of our major assets, SSN, outstanding debts, investment options and other things. However, regardless of what we do, we should be aware that there are scammers in car loan industry.