Bad Credit Car Loan Tips, Bad Credit Auto Loan Tips

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July 25, 2008

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Bad Credit Car Loan Tips

Know your credit score. It's an obvious bad credit auto loan tip, but we have to say it. Get a free credit report from each of the major bureaus once a year (www.freecreditreport.com). Also review our bad credit car loan guide for step-by-step instructions on getting and using your credit score.

Know your likely interest rate and prepare a budget. Bad credit used car loan rates often run between 12% and 18%. Use a realistic estimate of your bad credit car loan rate and net monthly income drive your payments and, therefore, the amount you borrow. Here's bad credit car loan tip: use our auto loan calculator to prepare your budget, estimate your interest rate, calculate your payment, and determine how much you can borrow.

Consider your credit union. Many people belong to credit unions through work, school or other affiliations. Many others can join credit unions easily. In fact, an emerging class of credit union requires payment of only a small fee to join. Credit unions increased their share of auto lending dramatically in the last few years (some estimates have them above 15%). Further, as most operate as non-profits, they offer some of the most competitive rates available. So, key bad credit car loan advice: check your local credit union(s). (Read about other auto financing options here.)

Know how to work with used car dealers. Read about working with used car dealers here. When it comes time to negotiate terms, be ready for the Finance & Insurance (F&I) office. Our car loan page walks you step by step through setting your budget through negotiating terms with the F&I Manager. Really bad credit? Take this bad credit auto loan advice: Consider buy-here-pay-here lots and auto dealer financing.

Get loan quotes in advance. The best way to know if the dealer is giving you good terms is to submit the easy SmartCarCredit auto-loan-application. If you are worried about multiple credit inquiries, know that Fair Isaac (the people behind the FICO score) say: "Looking for new credit can equate with higher risk, but most credit scores are not affected by multiple inquiries from auto or mortgage lenders within a short period of time. Typically, these are treated as a single inquiry and will have little impact on the credit score."

Do you have good credit?

Your auto financing options may be wider than you think. Put your credit score to work with a couple easy auto loan tips. Check out our Good Credit Auto Loan Tips page.

Related Links

Considering a used car? Read our used car loan tips.
Understand your alternatives. Get auto loan quotes here.
Know how much you can afford. Calculate your payment and loan amount.

Disclosure: We developed the content for SmartCarCredit™ while working with automotive industry clients. We hope you find it helpful in making informed decisions. While we believe the information to be accurate, we do not guarantee its accuracy.

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