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How to finance a car with bad credit

Trying to finance a car with bad credit is difficult – there’s no lie about it. However, it is not impossible. You just need to shop around and look for ways to improve your chances. Before you start looking, be aware that you will not get the best interest rates and will pay a lot over the long term.

How Bad is Your Credit?

There are some who will not be able to finance a car with bad credit. You need to check what your credit report is like first to find out why your score is so low. Spend some time improving it to get a better deal on your car finance. You can do this by paying off your current debts and even just signing onto the electoral role.

Put Down a Deposit

The best way to prove that you are sensible with your money is by saving for a deposit. This will also show that you are serious about this car loan. You will need 10 to 20 percent depending on the type of loan that you opt for.

Go to Your Bank

You’ll already have a relationship with your bank so this is often the best place to go for a loan. The best part is that they will be able to check your finances, instead of just your credit score, to determine whether you can afford to make the loan repayments.

Choose an Affordable Car

When you want to finance a car with bad credit, you cannot go for the best looking car in the shop. Find a reasonably priced car so you don’t need to take out as much in the form of a loan.

Expect to Pay More Interest

As already stated, you won’t get the best interest rates. There are chances that you will get the finance if you opt for a higher rate of interest. That doesn’t mean you need to stick with that for the duration of the loan. Take it and make the monthly payments, which will help to improve your score. After a few years, once you have improved your rating, apply to refinance your loan to get a better rate.

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