© Oleg Guryanov Hand with keys on a white background.
© Oleg Guryanov
What do you need to apply for a car loan
Basic information for a car loan application
First of all, what do you need to have before you look for the lowest loan rate? Ideally, you should be employed by the same employer for at least a year. The same goes for your present residential address. You must also have a phone for contact of course.
What if my credit is really bad?
If so, you probably need to put a down payment. The amount will depend on the car of your choice but the average is below $5,000. You will not be sure until you have at least applied to several lenders.
Where to get a loan
Getting a loan from your local bank
Consider the relationship between you and your local bank. There are certain circumstances which may allow the bank to take a chance on you. For example, you may have paid off a small loan with the bank in the past.
Getting a loan through a co-signer
If this fails, could you get someone to co-sign the loan from the bank for you? This person has to have a good credit rating. In addition, he or she should be employed by the same employer for at least a year and resides in the same address for at least a year. But even this option will not work if your credit is too bad.
Getting a loan through the credit union
Are you a member of a credit union? This option may work even if you fail getting the loan straight from the bank, especially if you have a good relationship with the credit union. It is likely that the requirements are less stringent than those of a bank.
Other lenders
You may want to look for lenders with cheap loans online. You can find some of the best loan deals on the internet but take care to read the fine print before committing.
A final tip
Although there is a variety of ways in obtaining a car loan despite your bad credit, common sense says that your present earnings should be adequate for the monthly car payment, insurance, possible repairs and general maintenance in addition to your present expenditure.