If you have poor credit, it’s still possible to get an auto loan. Financing a new car can even help you rebuild your credit score in the long run — if you make all your monthly payments on time. A low credit score can make it hard to qualify for a loan, but if you follow these five tips, you’ll be in a new vehicle in no time.
Find a dealer who offers low credit financing
There are plenty of dealerships that offer good loan options directly through the dealer, so you don’t have to worry about getting turned down by a bank.
You can get pre-approved for a loan through a bank or credit union, which takes more than just your credit score into account. A pre-approval letter makes you look better to potential lenders, so you have a good chance of getting an even better deal from the dealership or another lender.
Get a shorter loan term
A shorter loan term is easier to get qualified for, and while the monthly payment is higher, you end up paying less in interest and saving money. However, be realistic — if you can’t afford the higher monthly payment, don’t opt for a short-term loan.
Make additional payments when you can
The less you owe on your car, the better your credit score will be — and, as a result, you’ll pay less in interest over time. Paying off your car quickly may mean cutting back on some other expenses for now, but it’ll have a great impact on your finances and credit.
Pay on time
Make sure you can make the monthly payment on time, every time. If you buy a car and can’t afford to make the payment when it’s due every month, it will only hurt your credit score, making it harder for you to get approved for any kind of loan in the future. Plus, not repaying a car loan can lead to repossession.
Have more questions about financing? Visit our finance department at High Point Mitsubishi.
High Point Mitsubishi
Phone: (866) 202-0488
2411 N Main St., High Point, NC 27262