When a person has been turned down for a car loan repeatedly, he or she may give up believing there is no hope. However, some lenders are willing to work with individuals with bad credit, no credit, or minimal income. What steps should be taken before applying for a loan to increase the chances of approval?
Start by obtaining a copy of your three credit reports. Many reports contain mistakes that could harm the individual when he or she goes to obtain credit of any kind. Doing so ensures any errors may be disputed before a loan application is submitted. While this won’t significantly raise the credit score, even a slight change may be of help when applying for a loan.
Begin Researching Loans
People often choose a vehicle and then attempt to obtain the necessary financing. The financing should be secured first, as this not only gives the borrower more options when it comes to financing, it also ensures the car shopper only looks at those vehicles in his or her price range.
Save for a Bigger Down Payment
While correcting any errors on the credit report and researching loans, save up as much as possible for the down payment. The more money that can be put down, the less the borrower will need to finance. It is best to have a down payment that is 30 percent or more of the overall vehicle price. Some lenders require a minimum of this amount before they will provide funds. Regardless of how much a person puts down, every bit helps as he or she will be paying less interest overall.
Compare Deals and Specials
Don’t simply research loans, and don’t get set on a single make and model. Compare multiple vehicles to find the best price for the desired features. Dealers often provide incentives that a driver may qualify for, so be sure to learn about these programs also to save more on a car.
Consumer Portfolio Services works with individuals who wish to purchase a car but don’t have a great deal of income. They also work with individuals who have had money problems in the past, as everyone should be able to own a car. Contact them today to learn more about how they may be of assistance to you.