Buy that New Car Despite Your Lousy Credit

By Jim Ferris

With lousy credit, getting a low rate new car loan maybe harder than if you had an unblemished credit history but don't give up hope. It can be done. Getting a low rate may be a little harder but that can be done too. First of all go in to the project with a positive attitude. Plan to do your research carefully and find the lenders who do this every day and are used to bad credit scenarios. I am assuming you have already obtained your free credit report from all three of the major reporting bureaus. They must give you a free one once a year. So go get 'em!

A good credit applicant can expect an auto loan interest rate at approximately 6%, maybe less. If you recently filed bankruptcy, the interest rate may soar to 18%. Frankly anything higher than 12% is unacceptable in my book. While obtaining prime rates with bad credit is hard, it is possible to find an interest rate two or three percentage points above the norm. One of the troubles you can get in to with a bad credit record is usurious rates that are being charged by some lenders. Again, shop around. Yes, its tedious and time consuming but it's well worth it over the life of your new car loan. You will pay enough in all conscience for a new car and you don't need to add to your woes with a crazy rate.

When you go after your first new car loan after a run of bad credit decisions you are likely to find that your options are few. But choose as wisely as you can and figure to refinance after a while once your track record has improved. At first, you may have few options. Looking at previous car loans your credit may have improved since you wrote the first car loan. If so, you may qualify for comparably low rates. If your credit has not improved, refinancing is still worth the effort. Another lender may offer a lower rate, which could reduce your monthly payments. Every reduction is worthwhile over the life of an average length new car loan.

If you are not in a hurry, take some time with your credit report and resolve credit issues. Working to settle past dues and reducing static debts can make a huge difference in the eyes of lenders. There are several lenders to choose between and you can find them online easily. The key to acquiring a good refi loan is comparing different offers and you can accomplish this the easiest with an online auto loan house. If quotes are unacceptable, consider re-applying with a co-borrower if you have one, providing the co-borrower has good credit.

Now it may be a lot of work, getting and comparing offers and it may be work that you are not used to. But you need to start new habits when you are borrowing afresh. Nothing worse than following bad credit decisions from the past with similar practices in the present. Stay on top of your finances and keep current. You can turn that credit report around given time and yes Virginia, you can get a new car loan with bad credit and at reasonable rates.

Jim Ferris is seasoned credit consultant who specializes in advising those with credit problems. He writes extensively on the subject of bad credit and how to resolve problems. His articles and advice can be found at http://www.badcreditovercome.com and at http://www.badcreditdebtcounselling.com