How to Obtain a Car Finance Loan When You’ve Got Less Than Sterling Credit

When you start the hunt for a new car, you will find that there are many financing options available. However, finding the best car finance loan for you can sometimes be a challenge. With a whole range of options including different interest rates, monthly payments and lenders to choose from, it can all become a bit of a minefield. However, the problem becomes even more acute if you have a less-than-perfect credit record. If you are in this situation, here are some tips that you can follow to obtain a better car finance loan.

Compare Deals

It’s now easy to compare different car finance loans online, so this should be the first step that you take before you start your search for a new car. Simply head to a comparison site and use an online calculator, where you will be able to insert the amount you want to borrow along with some information about your situation, and you will instantly be presented with some of the best options on the market.

Provide a Bigger Deposit

If you can save up for a larger deposit then there is a good chance that you will be able to get a cheaper car finance loan. With a poor credit history you present more of a risk to the lender, so if you can put up a larger deposit this can help to lower the risk.

Use a Guarantor

If you know someone with a good credit record who is happy to be a guarantor, they can become a cosigner. This can often enable you to get access to a better line of credit than if you applied for the loan without a guarantor.

Don’t Always Go Through a Dealer

Many car dealers will offer you finance options because they make a lot of profit from these. However, don’t assume that you have to use them, even if it is the more convenient option. With a poor credit record, you may be better off finding a different source of funding instead. Even if you end up using the financing option provided by the dealer, always do your research first.

Get a Secured Loan

If you own your own property, you could take out a secured loan and enjoy a lower rate of interest. However, you have to remember that whenever you take out a secured loan you are putting your property at risk, so this is not a decision to take lightly.

Fix Your Credit Score

Another option to consider if you cannot find a good enough deal is to check your credit score. It may be that your poor credit history is the result of an error, and there are ways that you can go about resolving this. You could also find out why you have a low credit score and set about remedying this over the course of a year or so, which could enable you to get access to a better deal if you are prepared to wait.

Find the Best Car Finance Loan You Can

Just because you have a poor credit score there is no reason why you should not spend time looking for the best car finance loan you can find. The important thing is to avoid rushing straight into the first opportunity that presents itself because this will rarely prove to be the best option. Also, make sure that you can afford the payments on any loan that you take out because if you have problems repaying the loan this can damage your credit score even further.

 

Neil Stelling is an avid auto enthusiast who works in the banking sector. In his spare time, he enjoys sharing his insights with others through blogging for a number of different websites. Click here for information on bad credit car finance.

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