Bad Credit Car Loans
Although having bad credit might seem like the end of the world, Balise Volkswagen is here to remind you that this simply isn’t the case. Even though financing a vehicle might require a little extra work – and maybe even a little creativity. Less-than-perfect credit is more common than you may think, and there are plenty of lenders willing to provide loans for those with challenges.
The first thing you should do is check your credit score so you can better gauge the situation. You’ll know exactly where you fall on the credit spectrum, which ranges from excellent to poor. If you’re within the poor range, don’t panic. We work with some understanding lenders, and we’re here to guide you to one of their solutions. One of the surest ways to deal with a poor credit rating is to seek financing through a subprime lender. Subprime lenders work specifically with people in your situation, but keep in mind they often have high interest rates associated with their loans.
While seeking the help of a subprime lender might seem daunting, consider the bright side: this can be a chance to redeem your credit score. When you make your payments on time, your score will quickly improve. You can also try to delay your car purchase while saving up as much as possible for a hefty down payment, which will lower the amount you’ll need to borrow.
Securing a Car Loan
Another possibility is to ask someone close to you who has good credit if they are willing to cosign for you. This will increase your chances of getting approved and may even help you get a more manageable monthly interest rate. The risk here is to the cosigner, who would be liable for the amount owed if you were to default. For that reason, this is a very big favor to ask, and it would be understandable if the person says no. Another option is to seek out a loan from a credit union, as they usually provide favorable terms and lower interest rates (you may need to be a member of the credit union, though).
What to Do Once You’re Approved
When you are approved for a loan, the next order of business is to make sure you keep up with the monthly payments. According to Experian, your payments will account for 35% of your FICO score (credit score), meaning that if even one payment is missed, your score will take a plunge. The opposite is just as true, though, as making regular payments will rapidly raise it.
The takeaway is that as long as you have a clear and consistent plan, you can find a way to get behind the wheel of one of our quality VW models in no time. If you have any more questions, feel free to get in touch with one of our financing representatives, who will be more than happy to help.