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How To Be Approved For Bad Credit Car Loans
By EchoBay Loans Staff Writer

If you have bad credit and you've applied for a car loan, you might feel as though lenders are treating you like you have some sort of plague. The worse your credit is, the worse traditional lenders tend to treat you. Don't take it personally. Bad credit can happen to the best of people. Even if your credit has suffered some dings and dents, that doesn't mean that you can't finance your next vehicle purchase. In fact, if you go about it properly, bad credit car loans can be the perfect opportunity for you to repair and rebuild your damaged credit.

While it may be true that you're not going to qualify with the "A" credit bank down the street, that doesn't mean that you won't be able to obtain financing with a sub-prime lender that specializes in bad credit car loans.
These lenders tend to be a bit more accommodating and understanding than the average lender and can easily be found online through search engines or personal loan information sites. While these bad credit car loans may have higher interest rates, the can be a way to get the financing you need and to begin improving your credit history.

To increase your chances of getting approved for a bad credit car loan, you're going to want to get a copy of your credit report. This will allow you to ensure that everything on your report is accurate. Since your credit report is what lenders go by to determine whether or not you get approved for a loan and what interest rate you're going to be paying, you want to make sure that your report is as accurate as possible so that you can avoid any unnecessary headaches.

While you're looking at your credit report, review your outstanding debt. If you have any collection accounts that have not yet been paid, make sure you get those taken care of. You'll also want to try to pay down any high credit-card balances. This will improve your credit score and will help you qualify for a loan, and possibly a lower interest rate.

If your credit is damaged to the point that you can't qualify for a car loan with a regular lender or a sub-prime lender, you may want to ask friends or family to co-sign for you. If you're generally a responsible person and the flaws on your credit report occurred because of something out of your control, you may have someone who is understanding enough to help you out by co-signing for your loan.

However, if there is any chance at all that you will not be able to make the payments on your car loan, avoid this method of getting bad credit auto loans. If you were to miss a payment or two or were to default on the loan, it wouldn't only affect your credit; it would affect your co-signer's credit as well.

If you can't find anyone to cosign for you, you might want to take a look at purchasing a car from a dealership who offers "buy here/pay here" financing. Some of the smaller used car lots will offer this type of financing for people with bad credit. However, there's a reason why they do this and you need to be aware of those reasons. Number one, these types of car dealerships know that you can't qualify for bad credit car loans anywhere else and that you're pretty much between a rock and a hard place.

Because of this, they will tend to overcharge for the cars on their lot and the interest rates they charge can be ridiculously high. If you desperately need a car and you have no other choice, this might be your only option, although it isn't exactly the ideal way to finance your vehicle purchase. The best way to handle this situation is to purchase the cheapest car on the lot (as long as it's reliable) and pay it off as soon as possible. Then, when you have had a chance to improve your credit, trade in the car for a better one.

Just remember that your damaged credit won't necessarily keep you from purchasing the car that you need. Being an informed consumer who knows the ins and outs of bad credit auto loans and knows what options are available to you will help you through the process. Once you do get financing for your vehicle, make your payments on time each and every month and work to clean up your credit. Just remember, like many things, your bad credit is temporary and this too will pass.


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