Bad credit car loans are a savior to individuals with no or low credit scores but are looking for a new car. Due to their bad credit history, some people often don’t qualify for car loans provided by some banks and financial institutions. There are many such people in Canada alone.
The good news is you can apply for a car loan even if you have a low credit score. Before you do so, you should know a few facts about bad credit car loans:
Expect higher interest rates
If you are going for a bad credit loan, you should prepare yourself to face outrageously high-interest quotes from dealers. You should look for a subprime dealer who can help you understand complex interest calculations and formulate the best deal for you.
Your credit report is a must
Your lender will ask for a credit report, no matter how bad it is, before approving your loan. He will do so to determine whether or not you will be able to pay debts on time and report payment history. The process is relatively more straightforward for credit newbies, who will have to get a credit card and pay off small dues to build their credit score.
Income is necessary for loan approval
It’s a myth that income doesn’t matter while applying for a bad credit car loan. Your income and other debts determine the size of the loan that the lender can provide. Low income means there are chances of payment failures, which lenders try to avoid as much as possible. Your income is, in fact, one of the most critical factors considered in the loan approval process.
Auto loan scams are common
Many unscrupulous lenders promise you a loan but on vague terms. They may scam you to get credit life insurance or extended warranty, which only adds to your cost. You need to be careful of such scammers because they are lurking around everywhere.
If you need a reliable company that can get your car financed, you should reach out to us at TakeTheDrive. We can help you fulfill your dream of owning a car.