If you have poor credit, consider looking for a used car through subprime auto lenders. They can help you finance cars at a reasonable rate.
Here’s how you can go about it:
Sub-Prime Auto Lenders
Credit unions: Although your current credit union rejected your application, it may be beneficial for you to approach other credit unions in your area, as those tend to have less stringent lending criteria.
Specialized lenders:
These include:
Carmax: They can lend money to car buyers since they operate as car dealerships.
Drive Time: This is a car dealership that deals with individuals who have bad credit.
Westlake Financial: They need any vehicle buyer with good credit because they only deal with subprime and may have some great deals.
Online Lenders: These are emerging as a new way to buy a car via car financing ;
Lending Club: They can provide an auto loan, but you need a decent credit score.
Upstart: This online platform helps you get a personal loan, enabling you to buy a vehicle.
Tips For Improving Your Chances
Co-signer: A larger down payment makes it easier for lenders to give you a loan.
Down Payment: Having someone with a better credit profile as a co-signer will increase your chances of getting approved and result in a better interest rate.
Shop Around: Feel free to apply to numerous lenders to compare their offers. Ensure you have some periods between applications since you know that too many inquiries hurt your score.
Buy Here, Pay Here Dealerships: Some dealerships have lenders who are the dealerships themselves, but beware of the exorbitant interest rates on such loans.
Credit Repair: If there is still time, consider improving your credit history before applying. Repaying outstanding accounts and removing mistakes on credit files could help.
Final Thoughts
Sub-prime auto loans can prove to need to be clarified. Still, you can keep an open mind, consider several possibilities, and make a reasonable plan. In that case, you can get the right financing. Before signing the documents, skip reading the terms and conditions so you can know the loan repayment amount, including interest.