Using a Car Dealership to Qualify for Low Interest Car Loans

Poor Credit Car Loans

Receiving a loan with poor credit history involves a few more steps, but is well within the range of possibility. If you are able to show documentation of a stable income and a positive debt to income ratio, you will have gone far in negating your bad credit score. Other methods to consider are using a co-signer, and paying a larger than average down payment.

Qualifying for, and making timely payments on a poor credit car loan is one of the fastest ways to begin to rebuild your credit. Even if your initial interest rate is higher than ideal, after at least a year of on time payments, your credit may have stabilized enough to apply for refinancing. Contact your loan provider right away if you know you will not be able to make your full monthly payment. Most creditors will be willing to work with you to negotiate a revised payment schedule. It is important to be proactive to make sure your auto loan has a beneficial effect on your credit score.

Good Credit Car Loans

With a high enough credit score, you may not have to show proof of income at all. Whether you finance your car through your bank or directly through your car dealership, you will likely qualify for very low interest rates right away.

This will also give you more flexibility in the types of loans you will qualify for. Most low credit applicants will be restricted to secured car loans, and will use the car in purchase as collateral. While this is certainly an option for you, you will also qualify for a range of unsecured loans which may be quicker to approve and are not required to be backed by collateral.

Working With a Dealership

Regardless of your credit, dealerships will often have a better understanding of what documentation you need and how to best display your situation to outside creditors achieve the best rates. They work with customers from every end of the financial spectrum on a daily basis, and will know what steps you need to take to most efficiently use resources to procure a poor credit loan, or how to best maximize the benefits of an already excellent credit score.