Even if you have very bad credit, you still may be able to get a bad credit car loan. A bad credit car loan is possible for all people, depending on whom they approach and how much money you are looking to borrow. In order to get a bad credit car loan, it is important to first understand exactly what you need to know about bad credit car loans.
What is a Loan
A loan is an amount of money that you will borrow. This amount of money will need to be repaid to the lender in a timely manner that is pre-determined based on the terms of the loan arrangement. The amount of the loan and the loan interest rate will also depend on your credit history.
Why Credit Is Important
Your credit history provides insight into your past financial responsibility and track record. If you can prove that you have been able to pay off your loans in a timely manner and as promised, then chances are greater that you will be able to get a car loan. However, even if you have bad credit, you should still be able to get a car loan.
The interest rate is an amount of money that will be based on the percentage of the entire loan. This interest rate will usually be somewhere between six and 20 percent, depending on your credit history. Interest rates are an additional fee that you will have to repay to the lender in addition to your monthly principal interest payment. The better your credit history, the lower your interest rate.
Think About the Loan Amount
If you have a solid credit history, chances are good that you will have a lower interest rate and a higher loan amount than if you have bad credit. However, just because you have bad credit doesn’t mean that your situation is at all hopeless. Sure, you may have to pay a little higher interest rate and you may not be able to take out a large loan.
But, if you take out a loan and are able to repay it in a timely manner, than you will begin to improve your credit so that down the road, when you want to take out a loan again, you have a better credit history.
Contact us for more information about how you can get a bad credit car loan with us today!