Car Loan Tips for Bad Income
When your income falls in the low range, you tend to assume that you cannot take a car loan as the monthly payments are beyond your budget. At the same time, banks don’t consider your loan application, as your credit score is not up to their standards.
As a result, you believe that you will only be able to get a car loan in the future, once you improve your financial situation. Fortunately, there are several ways you can still avail of an auto loan, despite your income and credit. Here are four tips which will help secure credit from any financial institution:
Approach lenders who specialize in bad/no credit customers
Rather than going to banks, you should take a different approach to solve your problem. These days, several lenders all over Canada are offering car loans to consumers, regardless of their credit score. As they have tones of experience working with these types of customers, they will provide loans that are easy on your budget.
Always have a list of options
You should have backup options, in case things don’t go as expected when you approach a financial institution. For instance, you should have at least three to five cars on your list, which meet your requirements. Similarly, enter the details of a minimum of four to six lenders and dealerships with different rates of interest.
Don’t get the extras
One reason why banks are refusing to give you credit is due to the high loan amount. Dealerships offer extras to consumers, as it allows them to make larger profits and commissions from every sale. While these options look great on paper, there is a high chance you won’t find them useful.
Save up for a down payment
While this means you have to wait longer to get a car loan, it is still a better option than getting rejected by financial institutions. When you make a down payment, the size of your auto loan comes down, increasing the likelihood of getting approved. At the same time, it brings down interest rates, making the monthly payments affordable.
These are the four tips that will help you take a car loan, despite having a low income!