Top 5 Tips to Secure the Best Bad Credit Car Loan Interest Rate
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Curious about getting a car loan? Do you have bad credit? Follow these Top 5 tips to secure the best car loan interest rate.
1. Look for a newer car
If you have bad credit, buying a newer car seems to run counter to securing a good car loan interest rate. Like many things in life, the opposite is true. Bad credit car loan lenders want to make sure there is value in what they are taking on as a security. An older car is less valuable and its value will only decrease over time.
2. Check your credit history
You might know you have bad credit because you’ve been refused loans from banks and prime lenders. But as for how, you just don’t know. Obtain your credit history and check it for mistakes. It could help you obtain a better interest rate.
3. Pay down your outstanding debts
If you have credit card debt, a mortgage or other loans that you’re defaulting on or just haven’t completely paid off, you may want to look at consolidating your loans. This means combining your various debts into one loan. If you do, make sure you pay on time and as quickly as possible. Pay in person or use a direct debit system so you never fall behind. Paying this off and waiting a few months might help your circumstances as well.
4. Shop around, but don’t apply
You should enquire about the various options available to you by comparing different lenders. But don’t apply; an enquiry will be made and placed in your credit file. Lenders become nervous when looking at credit histories with high enquiry rates. They will think you’re a greater risk and not worth lending money to. Likewise, some lenders will try to take advantage of your position.
5. Get help from a financial or legal professional
Personal finance isn’t a simple balancing of percentages and repayments. It’s a complex process and you should get as much help as you can. Enlist the help of a finance broker or legal professional to help you consolidate loans, fix your credit history and advise you which loan product is right for you.
About the Author: Bill Tsouvalas is founder and managing director at http://www.badcreditcarloans.com.au. He has been working in the vehicle & asset finance business for over 8 years. Join the discussion with Bill on Google+ or on his finance blog.
Category: Car Loans, Car Purchase
