Being on the lookout for a good ideal on an auto loan if you have questionable or bad credit can become a long waiting game. The chances of a really low rate for people with a FICO score under 600 being advertised in a newspaper or on TV are slim-to-none.
A better idea is to take a more proactive approach with finding auto loan deals that work for any credit situation. By aggressively going after what you need rather than just sitting back and hoping for the best, you will have a 10 times better chance of getting it.
The truth is, there are many auto loan lenders out there who specialize in working with borrowers with a full range of credit scores, from good to bad. You just have to know how to prepare yourself for finding them and then applying.
If you want to find online auto loans for good or bad credit individuals, here are 7 steps to getting what you want:
1. Know your limitations and choose the right car:
You may have your eye on that hot new European import, American muscle car, or sleek Japanese sedan that is sitting on the dealer lot that you pass by every day. And to be sure, there are of course no rules written anywhere that say you can’t qualify for a loan to buy the car of your dreams right now.
However, if your credit score is below 600, a more realistic approach for you at this point would be to set your sights on a car that is not quite so expensive. Going after a lower-priced car means a smaller auto loan amount – which will increase your chances of getting approved significantly.
2. Understand your FICO score:
You may not enjoy looking at your credit report, especially if you have a low FICO score. However, taking the time to look at your report now will pay off later. That’s because when you do, you will have the chance to prepare explanations regarding any particular items that a would-be lender might flag as undesirable. And, it also gives you the opportunity to spot any errors in your report that you could get removed at this point.
3. Talk to a friend who is in a similar credit situation to you about their preferred lender:
Think about your circle of friends: know anybody with credit problems who also owns a car? It just takes a quick phone call or e-mail to find out whether they can point you in the direction of a reputable bad-credit lender.
4. Start your online search:
Even if you get suggestions from your friend about a good lender, still take the time to increase your list of candidate car loan lenders by doing an online search of your own. Keep your eyes peeled for “bad credit auto lenders” and “any credit OK auto lenders.” This is how they refer to themselves, and they are looking for customers like you.
5. Compile a list of 5 bad credit online auto lenders:
Make sure your search yields you at least 5 solid-looking lenders. More choices means more opportunities to get approved at the lowest-possible rate for your situation.
6. Contact at least 3 of them:
Now, set aside an hour or so and contact at least 3 of them. If you like what you hear, go ahead and apply to all 3.
7. Move on if the offer does not meet your interest rate or payment needs:
Each time you get an offer, be sure to move on to the next one if you suspect you can do better in terms of the interest rate. Remember, you always have other options. No matter what, make sure to follow through in applying to all 3 lenders.