How to Get a Car Loan, When Your Credit Score is Below 600
One of the disadvantages of having bad credit is its negative impact on availing a loan from financial institutions. For instance, if you approach a bank, they will check your credit score, and reject your application, as it doesn’t meet their standards.
Having a credit score below 600 doesn’t mean that you can never take a loan from a financial institution. You can still get a car loan, as long as follow these simple tips:
Define what is affordable
The first thing you need to do is understand how much you can afford to pay if you take a car loan. In other words, you need to create a sound budget, which takes care of all your expenses. Keep in mind that the monthly payments of the car loan, shouldn’t be more than 15% of your salary.
Find a cosigner
One of the best ways to ensure that there is a high chance of your loan application getting accepted is to find a cosigner. The cosigner should have an exceptional credit history, along with a great source of income, allowing him/her to pay the loan on your behalf (in case you can’t do it).
Increase your score
Another technique that you can use to increase the chances of getting a car loan is to increase your credit score. You can do so by paying off all your debts on a regular basis. You can also use a credit card to increase your score. However, make sure that the amount you spend every month doesn’t exceed how much you can afford to pay.
Research about various lenders
A lot of lenders in Canada are now open to helping consumers with different financial backgrounds to get car loans. Go through the websites of these lenders to see which one suits your requirements. You can also contact the lenders to see if they are willing to give you a loan, despite your credit score.
These are the four tips you can use to get a car loan, even when your credit score is below 600. Get in touch with TakeTheDrive, a top-notch financial institution, which specializes in handling consumers with bad credit!