When you are trying to get a new car loan but you have a bad credit history, your chances to get approved will get hurt, but you will still be able to get a new car loan. The only thing that you have to worry about is that you'll probably get a high interest rate on the loan. If you're not knowledgeable about credit ratings, the lenders may even give you a higher interest rate than your bad credit deserves. Having a bad credit is like placing a sign on your forehead that you are desperate for a car loan. Trying to obtain a bad credit new car loan makes you a vulnerable to lenders who will take advantage of your unfavorable position. Allowing yourself to be duped will put a bigger dent on your credit rating than there already is. So make sure that before getting a bad credit car loan, try to read up about it and your chances first.
Perhaps the best way to avoid being taken advantage of is to wait for the right time to obtain a car loan. Don't make the attempt when you know that your credit rating is not going to cut you a good deal. A bad credit car loan will also limit you to just a few car choices. You will have better chances of getting a good deal if you choose to clean up your credit first. If you managed to get by with your old car or by commuting for a long time, going on that way for a little more time won't hurt. At least, in the end, you will get the car you want, and you won't have difficulty paying off the soaring interest rates.
Here is how bad it can get. When you try to obtain a bad credit car loan, you will most likely get a high interest rate on the loan. The interest rate can get as high as 23%. Aside from the interest rates, you can also expect the insurance rates to soar. As mentioned, you can avoid these scenarios by cleaning up your credit first. However, the worst case scenario is that your bad credit new car loan application will get rejected. It is also important to remember that when you do get rejected, don't let it get you down. Don't let the rejection make you feel desperate and agitated. The more desperate you seem, the more chances you get of being taken advantage of.
To increase your chances of getting approved, your best move is to wait and try to repair your credit first. You don't need someone else to do this for you. There are a lot of tips and advices online on how you can repair a bad credit. Aside from that, if you recently moved into a new house, it will not be the best time to get a new car loan as well. You will have better chances if you've been in your present address for about six months. Also, your current debts will also matter. Make sure to pay off your balances if you have any credit cards, and any outstanding loans and late payments. These are all considered negative marks on your credit.
Getting a bad credit new car loan is like setting up a trap for yourself. So if you are planning to get a new car loan someday, make sure that you take care of your credit rating. And wait for a while as you repair your credit rather than get a bad credit new car loan.
