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how to get a car loan
1. Going into an auto loans with bad credit
meeting can be a little unsettling especially if you
have no idea what to expect. You need to present
yourself as a worthy candidate to the lender or car
dealer. Thus, it pays to do research and be
prepared. Before you car loan application is
approved, you will be required to provide some
documentation to confirm your identity and
financial status. Most lenders will request for your
current driver's license, a recent utility bill and
your pay stub.
2. While it is easy for people with perfect
FICO scores to get approved for financing,
those with lower scores will have their
applications scrutinized more. Therefore, make
sure you have the correct documents and
provide honest answers to any questions you
are asked. Most subprime lenders will go their
way to verify the documents that you provide.
Your employer and landlord may be called to be
asked about you.
3. Therefore, be upfront on any questions
you are asked either orally or in written form.
The aim of the lender is to help you get a loan
that you will be able to afford. Having all the
required documents will not make you qualify
for auto loans with bad credit. However, it is a
good start and you have better chances of
being financed than a borrower who does not
present all the required documents.
4. Lenders want to know if a borrower is
responsible and having all the documents
required is one way of showing you are
responsible.
5. If you have to apply for an auto loan but
have a tainted credit history, you should take
steps to increase your chances of approval.
Getting approved for auto loans with bad
credit requires a borrower to prove that he or
she can pay back the amount being borrowed.
In other words, a borrower must not put the
lender at a risk of going at a loss by failing to
pay back an auto loan given.
6. Lenders will usually look at your credit
score and history to assess the risk you pose
should they finance you. If you have a great
likelihood of being unable to pay back a loan,
most lenders will shy away from financing
you. If you really have to apply for a loan with
bad credit, you should reduce the risk of the
lender financing you. This will make the car
loan lender confident to give you a loan.
7. One of the things you can do is to offer a
down payment for the amount you are
borrowing. Any amount that is between 10 and
30 percent of the total amount you are
requesting will usually be sufficient as down
payment. When you provide a down payment,
lenders become confident that you are
committed to paying back the amount of auto
loans with bad credit you are requesting. Most
of them will therefore approve your application.
8. You will also be charged a lower interest
rate for the loan than would be the case had
you not provided a down payment.
