A car vrooms past you and right in that instance, you’re awestruck. The shining chrome, leather seats, tinted glass, powerful engine and alloy rims take your breath away. You decide that somewhere down the line, you will own this vehicle. As the car is expensive, you decide to opt for a loan, but due to your bad credit history, the car loan is disapproved.
Having a bad credit score has several disadvantages when it comes to availing a loan and it’s the same as a car loan. Lenders hesitate to provide a loan to individuals with a bad credit score as the latter may default. If you’re an individual with a bad credit score and who also earns a low income, then the desire of owning your dream car plummets.
Even if there are lenders who will provide you with a loan despite your bad credit, they will demand a higher down payment to bring down the level of risk. But, there are individuals who can’t afford the higher down payment and also have a bad credit score, for them, it gets impossible to avail a car loan, or that is what they think.
You will be pleased to know that there are other ways through which it is possible to improve eligibility for lower interest rate even with bad credit for car loans –
• Good Bank Savings
• Stable employment
• Residential stability
• Creditworthy cosigner with good debt to income ratio
These factors reduce the risk for the lender and he can easily provide a car loan even with a bad credit score and low annual income. He may also charge a lower, more favorable car loan interest rate if the above-mentioned factors convince him that you aren’t a bad bet.
However, to know your exact car loan eligibility and the documents that you’ve will suffice for the loan, you need to visit the lender first. Only after a thorough check of your documentation will the lender be able to determine whether you can avail a loan or not.
So before you apply for a car loan ensure that all of your documents are properly and there is no chance of they getting rejected.