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How to Find a Great Deal on a Bad Credit Car Loan

How to Find a Great Deal on a Bad Credit Car Loan

Bad credit car loans are useful for anyone with less than ideal credit who needs a new car. Rather than ignoring people in this situation, this type of loan was invented to keep you on the road. We asked our Bronte auto loans team to outline the moves you can make to ensure find a great deal on a bad credit car loan.

 

Bad credit car loans in Bronte

 

A bad credit car loan is a subprime loan designed for people with less than perfect credit scores. Whatever the reason for your situation, these products are designed to provide the loan you need at a price you can afford.

 

They are more expensive than standard auto loan though. Lenders are assuming more risk, so will charge more interest rate to offset that risk.

 

There are things you can do to minimize that risk and get a great deal on a bad credit car loan though.

 

Clean up your credit report

 

All lending decisions will use your credit report and your credit score to either agree or refuse the loan and calculate the interest rate you’ll pay.

 

Cleaning up your credit report means making sure it’s completely accurate, that any credit accounts you have paid off are marked as such and all your personal information is correct.

 

Check your score, outgoings and everything else on your report while you’re there as mistakes can happen.

 

Save up for a down payment

 

The higher your down payment, the higher the chances of being accepted for the loan and the better the rate you’ll get.

 

Lenders like it when borrowers put their own money down as they know their risk is lowered if you default. The lower the risk, the lower the interest rate they will charge.

 

So, while you’re preparing for the loan, get a down payment together. It should be a minimum of 10% of the cost of the car but more is better for bad credit auto loans.

 

Do your research

 

Assess your budget, research lenders and check all your options. Bad credit car loans aren’t your only path to car ownership, just one of many.

 

Check out all your options, use a car loan calculator to see how much you can afford to borrow and use a prequalification tool to see what kind of rate you’ll get.

 

You can use all this to decide whether any loan you’re offered is competitive or not.

 

Consider auto loan preapproval

 

Auto loan preapproval is like a dry run of a loan application. You enter some details and get a quote from a lender. That quote will outline your loan, the interest rate, monthly payment and any restrictions on the loan.

 

It’s a quote for a loan that is very useful in making decisions. Most preapprovals do use a hard inquiry on your credit score though so we recommend only using it when you find a lender you might want to do business with.

 

We will use all our skill and experience to deliver the lowest possible Bronte auto loan rates, guaranteed. Contact Car Nation Canada Direct to learn how we can help.

 

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Categories: Auto Loan

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