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The short and straightforward answer to this question is yes; you can still get a car loan even if you don’t have a stellar credit score. You just have to know who to approach and what terms to look for to ensure that you can get the car of your dreams but still manage to pay the same with decent terms. Here are some tips to help you get a car loan even with a bad credit rating.
Get a second opinion
A credit rating is considered low if it’s below 670 of the FICO credit score range. To recap, this standard rates credit from 300 to 850, with 850 the highest and 300 the lowest. So don’t take just anybody’s word about your credit score. Request for your credit report and score to be sure. Allow the lender to evaluate whether or not they can approve your car loan. There are still many lenders out there who extend loans to individuals with tarnished ratings.
Explore your options
It’s easier to get approved for a car loan than a housing loan. This is a piece of welcome news for borrowers who are having a hard time getting their car loan approved. This means that less strict standards are applied to them during credit evaluation.
When you find lenders who can extend a loan to you, be wise in negotiating the interest and loan terms. Because some lenders may extend loans to borrowers with low credit scores, but they also consider these borrowers high risk. Hence, to eliminate or lessen the risk, they peg a higher interest rate as well.
But not all lenders are the same; that’s why it would do you good if you research and choose wisely. Determine what you can afford and negotiate for the best interest rate.
Takeaway
Getting approved for a CAR LOAN takes a lot of research and negotiation. But more than these, also consider your buying and paying capacity. Use this new opportunity to improve your credit score. Get real with your finances and only aim for what you can afford.
