Can you afford a new car right now?
For some of us, we want some new when we want it. But is a new car right for you at this time? This is something that you must consider for many reasons. The most obvious is the added strain on your existing budget.
Before you get your eyes set on the shiny new red corvette, you should sit down with your family and establish your budget. This can be easily done by assessing your existing expenses and possible price ranges for a car note. The second reason is also obvious, but sometimes overlooked.
If you are suffering from poor credit and you happen to default on your auto loan, you chances of finding another financer will be slim to none. So once you have decided how much you are willing or can afford to pay, you are that much closer to making an informed decision about the right auto loan for you.
Your credit history
This leads to the next factor, your current credit score and credit score. It is best practice that at least once a year, you should review your credit score to ensure there are no errors and to know your current standing. Understanding your credit report will help you better understand your options for obtaining a poor credit auto loan.
Many times, your loan rates will be higher than that of someone with a high credit score. Also, in most cases, you will be required to put down a high down payment. Even with the higher rates and down payment, some financer will also request a guarantor or cosigner.
Do not feel embarrassed or taken aback. Creditors will do this to offer as a cushion or protection in the case of a default. So it is very important to begin your search for a highly qualified cosigner, preferably someone that has a very high credit score and little to know debt.
You will also need to be prepared to provide documentation that will verify your work history and income. Some other documents you can have on hand are your pay stubs, utility bills, as well as, if possible, your cosigner. Another important tip, you will want to work at improving your credit score, so in the future you will be able to get better rates.