Having a credit score that falls below 620 classifies you as a sub-prime borrower, which implies that you will not get access to some of the most attractive loan options. However, getting your auto loan with bad credit should never be a major concern. After all, almost 25% of UK citizens have a bad credit history because of issues such as bankruptcy, repossession and failure to pay bills in good time. On the current lending climate, however, getting a loan depends on several factors and not your credit score alone. Before you start sulking, therefore, consider the following steps towards getting an auto loan with bad credit.
If you are looking for a car loan but you are concerned about your credit score, then credit unions should come to your mind first. They command a growing share in the car loan market, which works to the advantage of members because credit unions charge a very low interest rate. Besides, they offer a relatively flexible payment plan, which favors people with bad credit.
When turning to a credit union, however, it is recommended that you give preference to the unions with which you have an existing relationship. If a lender knows you, they might be willing to consider your present circumstances when deciding the terms of the loan.
Consider peer-to-peer lending services
Before the emergence of banks and credit card companies, people used to get loans from their friends. As technology advanced, however, peer-to-peer lending has transformed into a formal system of financing. Currently, peer-to-peer lending involves borrowing money through an online platform, but in this case from an individual and not a financial institution. Also known as person-to-person lending, this loaning option is growing in popularity, posing bad credit car finance option for people who are wary of their credit score.
All you need is to create a profile and post a loan listing which includes the amount that you wish to borrow. Conversely, never forget to include the reason for which you are borrowing. Investors will then choose the opportunities that they think are appropriate. Most of them have opted to take chances with people of low credit scores, which assures you of getting an auto loan.
In most cases, peer-to-peer loan repayments are reported to national credit bureaus, which helps you to build your credit score once again.
Find a co-signer
If you cannot qualify for a car loan because of the credit score, you have the option of finding someone with a good credit score to stand in as your co-signer. Whether it is a friend or a family member, the idea is to find someone who trusts you, and who is willing to share responsibility in case you default.
When getting a loan with the help of a co-signer, the payment history will be reported on both credit records. If you make the payments in good time, therefore, it will benefit your credit score as well as that of your co-signer.
Irrespective of the fact that they require more negotiations and research, car loans for people with bad credit are by no means impossible to get. Rather than accepting hefty down-payments and sky-high interest rates, carry out your research in good time and settle for the most appropriate option.
Applying for an Albion Car Finance loan under any circumstances will help you get an auto loan as you also work to clean your credit history – TO START THE PROCESS JUST CLICK HERE.