When you have bad credit, it becomes challenging to find a bank that is willing to provide you with an auto loan to purchase an SUV. You run from pillar to post, looking for a financial institution, who will accept your application. You have to be okay paying high rates of interest, as you believe you have run out of options.
Luckily, several lenders throughout Canada are ready to provide bad credit car loans to you, giving you the opportunity to pick up your dream vehicle. Here are a few tips which will help you purchase an SUV, despite your bad credit:
Find a cosigner
If you want to make it easy to obtain approval for your auto loan, you need to start looking for a cosigner. The individual who agrees to become one acts as a guarantor, who will make the monthly payments for your credit, in case you fail to do the same.
Make sure the cosigner has a high credit score, to get lower rates of interest. As another individual is responsible for your auto loan, make sure you explain all the necessary information, before asking him/her to sign any documents.
Increase the size of down payment
One thing every lender likes to see is an increase in the size of the down payment, as it helps mitigate the risk. When you can make a cash payment, it shows the institution that you have the discipline to make sound financial decisions. Although it might be a little difficult, it is always worth the effort.
Replace your wants with needs
A lot of times, buyers tend to confuse their needs with desires, which makes it harder to get auto loans. For example, you only need a mode of transportation at the moment, as you don’t have access to a vehicle. You don’t need an SUV with all the bells and whistles, because you won’t use all the features. At the same time, it increases the monthly payments, making it challenging to repay them on time.
These are the three tips you need to follow if you want to purchase an SUV with bad credit. Make sure you go through the documents, before agreeing to take an auto loan from a lender!