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Do you know that even with a bad credit score, you can still own your dream vehicle? When it comes to credit history, the impact it has on whether you will get your loan approved for your car or the interest you will incur when you make your car purchase is seen. Your credit history is a signal to lenders whether you can be trusted for a loan or not – a credit history and score has that power. However, bad credit should not be a barrier from getting your dream vehicle either by loan or by purchase. So, what tips or methods are there to allow you to purchase your dream car with ease even on bad credit? Let’s get started! How to Buy a Car With Bad Credit and $0 Down Get in Tune With Current Interest Rates Even with a bad credit score, nothing can stop you from getting informed on current vehicle loan rates. Doing your research makes it easy to know what to expect with your credit score. With a good credit score, it's much easier to get a good interest rate on a car loan. Unfortunately, this is not the case with a bad credit score. The lower your score, the higher your interest rate will be. It can even increase your interest rate by up to 50%! The price tag on your car, as well as the monthly interest rate on your vehicle, is affected by your credit score. So, the best thing to do in this situation to avoid an overcharge – because some lenders and dealers do so - is to know what is obtainable and make your bargains on that. Work on Your Credit One of the best advice you may receive is to work on your credit score. A bad credit score lowers your chances of buying a car on easier terms, so the best thing to do is plan ahead and work hard on improving your score before buying or loaning a car. A few things you can do are: Report and properly handle credit report errors Pay past due accounts Lower your credit utilization to no more than 30% Those strategies could go a long way in getting you better terms when you finally want to make your car purchase. Buy Only What You Can Afford This may seem obvious already, but a lot of us (even those with bad credit) still go for expensive cars. Going for an expensive car with a bad credit score does not play well for your credit report. Take a moment to look at your budget. What do you have left over when you pay your bills each month? That may give you a better picture of what you can afford. Check what car you can afford on your budget and keep to that no matter which flashy car catches your eye. Be Careful About Your Deals In simple words, watch out for scams and fraud. You might be surprised that persons with a low credit score are usually the most targeted for scams. While it is fun to buy a car, don't let yourself get swept up in all the excitement - stay focused and aware and don't fall prey to the tactics of scammers. You can "cross your Ts and dot your Is" by thoroughly perusing paperwork for loans that you are offered, especially ones that sound too good to be true. Get Your Dream Car - Even with Bad Credit - at Dan Cummins In conclusion, even if you have a bad credit score, you can get your dream car. You just need to do your research and shop around. Check out our huge line of new and used cars at Dan Cummins, where we treat you like family. At the end of the day, we care more about your satisfaction than our profit - so we're not like a typical car dealership. We're a trustworthy car dealership. We care about our customers and want to make your experience the best it can be. So come check us out. You can also browse used cars from brands you love here. In addition, we also sell car parts and accessories for a host of car brands. Ready to learn more? Click the button below or contact us at 877-661-2805. How to Buy a Car With Bad Credit and No Down Payment | Dan Cummins Auto Group - Louisville, KY

Are you looking at your credit score, discouraged, wondering how to buy a car with bad credit? Well, you’re not alone. Not everyone in this country has the best of credit scores or plenty of cash lying on the table. In fact, there are options out there to find an auto loan that’s meant for you. Here are some important facts to know before you start hunting for a car loan with a bad credit: Implications of Having a Low Credit Score Generally, lenders need to be confident that buyers will pay back the loan amount on time. That’s why they offer more perks to borrowers having excellent credit scores which are above 740.  This is because the score is a blanket indicator of risk, and for the bank, the lower the risk...the lower the rate. If your credit score falls below 640, you’re deemed to be a buyer with poor credit or a subprime buyer. In this case, interest rates will be higher because lenders set the annual percentage rate (or APR) based on risk.  If you haven't paid your bills on time or if you are maxing out all of your available credit lines, your credit score will decline.  The lower the score, the higher the rate. In addition, you may be more limited to your choice of vehicles you can buy with your bad credit score.  This all gets back to the aspect of risk.  The bank may limit the total amount you can borrow and try to align it with your budget.  This is a calculation of "Debt to Income," or DTI.  Here is an example of a DTI calculation: MONTHLY INCOME:  $4000 Total of Monthly Payment Obligations on Credit Report:  $1,700 Monthly Rent: $800 $4000/$2500 = .62 or 62% Debt to Income The lower the Debt to Income percentage, the lower the risk for the bank.  So income is just as important a factor in this equation as debt. How to Find Borrowing Success with Low Credit Scores When you want to know how to buy a car with bad credit, it’s important to know the small things you can do to improve your credit score as fast as possible. Taking six months to rebuild your credit score will strengthen your case but, this might not be possible because you need a car NOW. In this case, your options are: DOWN PAYMENT MONEY:  showing the lender that you have come to the borrowing table with several thousand dollars does several things.  Number one is that it let's the bank know that you are seriously invested in this auto loan with your own hard earned money.  They like this because it reduces the chances that you will let the car loan go to repossession.  Number two, is that it will lower the overall loan amount and get the payment more in line with your income and budget.  This is a key factor. INCOME SOURCES:  showing the bank that you make addition income is imperative.  Even if you have a side hustle, some lenders will accept proof in the form of bank statements showing the deposits.  But you must be able to prove to the bank that you make the money you say. CO-SIGNER:  So your credit is a 540 score and the bank has said "nope" to you borrowing money.  Getting a co-signer with a good credit score can move the declination to approval and still provide you with the credit rebuilding opportunity. Get a Hold of Your Credit Report Monitoring your credit score is key especially doing so well in advance of you making a major purchase.  In fact, you should check your credit score regularly on your own. There are various sources where you can gather this information from.  Before applying for the loan, you need to take time for corrective measures in order to improve the score. In order to run a credit check, you can rely on resources like TransUnion, Equifax, and Experian to provide your FICO which prepares scores based on your payment history and credit balances. So, a FICO score less than or equal to 580 represents poor credit while 695 is the average score that falls in the category of "good" borrowers. But, you need a report to get a hold on it. Hence, aim for a detailed report and see what factors may impact your scores. Have Reasonable Expectations Depending on your credit score, you may have to pay a rate of 12-15% while buyers with good credit standing need to pay a mere 5% as interest on their auto loan. When your credit score is subpar, you must set aside reasonable expectations. In fact, aim to buy a less costly car to accommodate a higher interest rate. Here, when ascertaining the amount of your monthly installments, don’t forget to add some room for expenses like fuel and insurance costs. In this case, if you are running on a tight budget, consider shopping for a used car instead. Shop Around for the Best Financing Deal After identifying potential models that you may purchase, your next target should be to find the best financing option. For this reason, it’s always prudent to have the dealer check with multiple lenders until they find you find the lowest rates possible. To start with, check online for the latest auto lending installment loan rates.  You also can google search some lenders and they normally publish some average loan rates on their sites.  You can also try to get a loan from a trusted dealership in your area. If your credit score is quite dicey, a dealer can intercede with lenders on your behalf. But before you proceed, lay your focus on annual percentage of the loan as it is given in the agreement. Where Can You Get Auto Loans With Bad Credit? It is a general misconception that people with a bad credit should settle for the first financing offer they get. Rather, you must get in talks with multiple lenders before going for an option. Well, your options include banks, dealer financial service groups, and car dealerships. Check them all to find the best rates and easiest loan terms. Once you’ve got the dealer and a loan that’s well within your financial capability, ensure a timely payment of this loan every month. Remember even a single delinquent payment can tarnish your credit ratings. So, be more diligent with repayments. In conclusion, bad credit doesn’t equal lost hopes of getting an auto loan. It’s better to get the facts together and do your homework. This will help you make informed decisions. Buy Your Dream Car Even With a Bad Credit Score Only at Dan Cummins! Want to learn more on how to buy a car with bad credit in Kentucky? Call our experts at Dan Cummins. Reach us at 877-661-2805 to discuss your needs. Can I Buy A Car With Bad Credit| Dan Cummins Chevrolet & Buick – Louisville, KY

You’re pulling into your driveway and you can feel it. Something deep within you that says your car won’t last long. But as you caress the dash of your cherished Chevrolet Silverado, you think, “I don’t know how to buy a car with bad credit.” If you think it's time to put your car out to pasture, read on to learn how you could buy a car with bad credit. Research What You Want Before you start going to dealerships you need to research the type of car you want. Are you looking for something like you had before? Or do you want to change things up? A good tip to use when figuring out how to buy a car with bad credit is to check out Consumer Reports. They have a lot of information on new and used cars. Plus, they often have reviews from other owners, so you’ll know what to expect with any make and model. Another great thing with Consumer Reports is that you can find out what others in your area paid. It's a great way to avoid sticker shock. “What if I want to buy a used car?” Try Kelly. The Kelly Blue Book, that is. Like its paper counterpart, the Kelly Blue Book website has a lot of information on used car prices. All you have to do is plug in the make, model, and condition of the car to get an estimate of its worth. Check Interest Rates One of the first things you should do is check the current interest rates on car loans. Then, when you have a solid number, check your credit score. By checking your credit score now, you’ll get to see where you are and where you should be. This will give you a better understanding of what kind of payments your credit score can snag you. The best part is that your credit score might not be as bad as you think. Oftentimes,  you might build up this scary number in your head, only to find out it’s not so bad. It might not be the best, but your credit score can always be improved. Get a Gas Card The best thing to do when figuring out how to buy a car with bad credit is to get a gas card. This might seem like silly advice, but it can work. Here is what you do: Apply for a gas card or any other card with a low spending limit. Then, use it to only to buy items you can afford, like gas. As you pay off the card each month, you’ll show you can make payments and raise your credit score. It’s a small life hack that can go a long way and shows dealerships that you're responsible with payments. Don’t Overspend Another great tip on how to buy a car with bad credit is don't overspend. It’s important that you keep your spending in check. Even if you’re not going to hop over to a dealership tomorrow, try not to rack up unneeded debt. The goal here is to keep your monthly bill payments affordable. That way when it is time to buy, you and your credit will be ready. Consider a Larger Down Payment By now you should have a decent idea of what you want and what it’s worth. If you have some time before you need a new car, start saving for a larger down payment. Bigger down payments mean a better interest rate and lower monthly payments. This would also be a good time to figure out what your “all-in” budget is. This is the highest amount of what you’re willing to pay. Go to Your Bank or Credit Union If you’ve crunched all the numbers and still don’t know what you can afford, get pre-approved. This means going to your bank or credit union to see the type of car loan they're willing to offer. The bonus of getting pre-approved is that you’ll get an even better idea of what you can afford. “Could I use USAA?” USAA is a great bank, and if you want to use them, why not? There’s just one thing to keep in mind. USAA has their own car buy services and are likely to recommend a car dealer from their list. If your dealer works with them, great. If not, just be sure to tell them who you're thinking of buying from. This will save you the hassle of getting calls from their dealer list. No, thank you. Speaking of dealers, you should also see what financing your dealer has to offer. It might shock you to know that dealers can sometimes have the best interest rate around. Read the Fine Print No matter where you get your car from, you need to read everything you sign. This ensures you know the kind of deal you're getting and won't be surprised later. This would also be a good time to check out any extended warranties your dealer might have for used cars. If you can afford it, a warranty for a used car could save you a lot of trouble later. Avoid Unneeded Extras Okay, you know what you want, how much it costs, and what you can afford. Now comes the hard part. What are you willing to give up? We know this is a hard question. One of the best things about owing cars is all the fun features that come with them. But when you’re dealing with bad credit, you may need to forgo heated luxuries seats for now. Keep in mind this is not forever. Whatever car you buy will serve you well, but it won’t be your last. There will be plenty of time for you to improve your credit score enough so you afford all the extras you want later. One thing you could do is use the “gas card” method from before. Only, instead of getting an affordable credit card, you’ll be getting an affordable car. This will do two things: 1) It will show the credit world at large that you can make payments. 2) It helps you build a solid relationship with a dealer you can trust. So, when you’re ready for an even better car, you’ll know exactly what dealer to go to. Buy a Car With Bad Credit from Dan Cummins Today! Dan Cummins is Kentucky’s newest Chrysler, Jeep ®, Dodge and RAM dealership! If you're wondering how to buy a car with bad credit, call Dan Cummins at 877-661-2805 or click below to get the new or used car of your dreams.  We are sure you’ll find what you’re looking for at our Paris, KY dealership! How to Buy a Car with Bad Credit | Dan Cummins Chevrolet & Buick

A down payment on a car is your ticket for easier payments during the term of your loan; and it’s even more important when it comes to bad credit car loans. Therefore, it’s crucial to put down the right amount. Regardless of bad credit or good credit, a down payment will help greatly. I understand it might be hard to make a bigger down payment if you are looking for financing with bad credit, but it’s important to put down one that’s higher than average; especially since that average is so low. Then again, buying a car isn’t and overnight process. Therefore, you should have a little time to tuck some extra cash away for a bigger down payment. What is it? The down payment is quite simply the amount of money you can put down on the car before financing. For example; this means if you put $5,200 down on a $26,000 car, you’ve reduced the price of the car by 20 percent. Now, instead of getting a loan of $26,000 for the car, you only need one to cover $20,800. Generally speaking, it reduces the amount of the loan required for the car you want to purchase. If you have bad credit, chances are you won’t be going after a $26,000 car. But, the principal is still the same. Why is it Important? First and foremost, it shows financial responsibility. If you walk into a bad credit car dealership with a fat wad of cash ready to slap down on a car, the dealer is more likely to give you financing. It shows you are financially responsible enough to save up the money for the down payment; which means chances are you’re responsible enough to pay off the loan they give you. Secondly, it allows you to offset the higher interest rate. For bad credit consumers, interest rates on a car loan can be anywhere between 14-20 percent depending on your state. Therefore, it’s important to pay off as much of the car as possible before getting a loan with that type of interest rate. It will make paying off the loan much more manageable in the long-run, because now there is a much smaller total to pay off. Finally, it allows you to have a shorter loan term. Long-term loans are the bane of consumers with good credit, and extremely detrimental for those with bad credit. Typically, you don’t want a loan to go for longer than 60 months. A bigger down payment can prevent that from happening. This is because the high interest rate tacked on will make paying off your car loan a costly endeavor. Putting down the largest amount of money possible is a good way to not only reduce your loan-term, but also the amount paid overtime. How Much Should I Put Down? Put down as much as you can afford. I’m not saying you need to pay off half the car now and the other half overtime, but 20-25 percent seemed to be the recommended amount long ago. In 2015, the recommended amount is only 10.4 percent; which is what’s causing the average loan to last more than 68 months. Which is why I said earlier it’s crucial to put down more than the average consumer, especially if you have bad credit. On a loan that long with bad credit, the interest rate will end up costing more than the car. Also, if you want to upgrade to a new car after your credit has improved, but you haven’t finished paying off your previous loan yet, it will carry over.

Declaring bankruptcy is no easy feat. While this social safety net is an invaluable resource for many debtors who find themselves in trouble, it can also carry long-term ramifications for your financial history. If you're not careful, bankruptcy could end up following you around for years afterward - but it doesn't have to. Securing financing for basic necessities - like a mortgage or bad credit car loans in Lexington, KY - can be much more challenging once you've declared bankruptcy. But, by following a few basic guidelines for getting your credit back on track you too will be able to resurrect your credit history and get back on your feet for good. Here are a few basic tips for re-orienting your finances after a bankruptcy, getting you back in the investment game and in good financial standing in no time. Consider A Bad Credit Car Loan To Rebuild Credit Ask any financial analyst or accountant and they'll tell you the same thing: the best way for a financial profile to recovery is by being active. That means that if you've faced bankruptcy and your credit rate has plummeted, the best (and only) way to bring it back is by being an active spender. Although some might react to a bankruptcy by limiting expenditures to only the bare necessities, this only encourages your credit score to stay in financial stasis rather than to get back on track towards recovery. One of the best ways to get back to being financially active after a bankruptcy is to take out a bad credit loan, like a bad credit auto loan, and pay it back diligently. These loans are directed at consumers with bad credit who maybe could not secure financing from any other dealer. While a borrower can expect to pay much higher interest rates on these loans, they are often the only option for those bad credit consumers looking to buy a vehicle on credit. By paying your bad credit auto loan back on time, in full, every month, you begin t prove to creditors once again that you can spend and carry debts responsibly - which could very likely help you secure a better loan in the future. Pay Off Your Lingering Debts Obviously, your credit score won't be budging at all if you still have old unpaid debts dragging it down. While declaring bankruptcy will likely allow you to walk away from many of your debts it will not eliminate all of them - like student debt and property liens, which need to be repaid before your credit can be truly recovered. Obviously, this isn't the easiest thing in the world to do, as you've probably landed yourself in a bad financial situation out of an inability to pay your debts. But Bankruptcy is designed to eliminate most of your remaining balances and allow you to reorganize your finances into a payment plan to settle your remaining accounts. This should take top priority for now, as eliminating this downward pull on your credit is vital to emerging from bankruptcy successfully. Get Proof Of Your Income One of the good things about using credit scores as a barometer of your borrowing habits is that they don't give the final word; that is, much of a lender's decision to give you a loan can also come from their own assessment of your borrowing habits. This means that you have a better chance to explain bad borrowing behaviors in the past and make your case for why you are a better borrower now. Having some official document of your monthly or weekly income won't raise your credit score but will definitely help work to convince a lender that you can repay loans within your budget. This proof can include your last pay stub or your W-2, which you can simply present with your loan application. For some lenders, this proof that you will have enough regular income to make your payments can be enough to convince them to approve your loan. Gather References A lender who is willing to hear your explanations for financial mistakes you've made in the past will also likely be looking for some indication that you have become a better borrower since then. Having proof of regular expenses or good credit references can work against some of the harm done by your bad credit score and could be enough to push your case to the approval stage. Having credit references from your utility company, your employer, your bank, or even a previous car dealer can go a really long way in convincing a lender that you have turned your behavior around since your bankruptcy and that you are fully capable of making responsible payments on time. A Secured Credit Card Can Help Another good option for the would-be borrower who's recovering from a bankruptcy is to take out a secured loan or a secured credit card. Having a loan "secured" basically means that you have backed up your loan with a deposit. This way, the lender can be sure they will not be losing money from the deal while you can be sure you'll have a reliable source of credit to build on. A secured credit card often comes with a credit limit equal to your initial deposit, usually no more than a few hundred dollars or so. As you use your card and pay back your balance, the lender will report this good behavior to credit reporting companies, which will in turn help raise your credit score. And, since there is little risk involved, this is a relatively easy way to get back on your feet quickly. Most banks and lenders will grant you a secured credit card as soon as six months after your bankruptcy, which means you can be back on the road to financial recovery within the year this way. And, since the card works on a deposit you give to the lender, you will actually make that money back - plus any interest it's earned - when you close the account. This means you will not only be helping your credit score to improve, but you may actually make a little bit of money doing so. Don't Lose Confidence In all reality the absolute most important thing you can do as a post-bankruptcy borrower is to keep your head cool and keep yourself focused on the goal of rebuilding your credit through active financial action. A disillusioned borrower who loses all hope of rebuilding credit after a bankruptcy is sure to do just that, since the only real way to pull yourself out of the depths of bad credit is with smart investing, responsible borrowing and an active financial profile. No lender is going to want to give a loan to a borrower who has already declared bankruptcy and who seems too tentative to get back in the game. This borrower looks like a risk for the lender and will likely be turned down for security's sake. By remaining fiscally active after a bankruptcy you not only inspire confidence in yourself as a good borrower but also give lenders a good reason to think your spending behavior has actually turned around. Nobody ever said that getting through a bankruptcy was easy; rather, it's one of the hardest things you can do financially, and arguably not enough people declare that probably should do so. It's understandable: the post-bankruptcy financial world can seem like a scary and unforgiving place. In reality, however, it's not so hard to get your credit back on track even after the worst, and by following these guidelines you too can get yourself back and borrowing before you know it.

Bad credit can certainly limit your ability to get a loan for a car. Some lenders won't even give you the time of day, while others may suggest a plan that isn't financially feasible. Luckily, there are still several ways you can secure that solid auto loan. Follow our guide below, and you won't have any issues when you visit bad credit auto dealers. As you're about to learn, many of these businesses need you as much as you need them... more Shoot for the Moon There's no reason to limit yourself to specific loans. We understand the logic: you're attempting to avoid the loans that are more financially beneficial because you assume you won't get approved due to your bad credit. However, BankRate.com says that that point of view may be a bit shortsighted. While your poor credit may have resulted in a subprime mortgage loan, that won't necessarily be the case for automobiles. Since these types of loans are often for less money and run for a shorter amount of time, you could potentially expect a "prime or near-prime" loan for your new car. Shop Around Similar to the advice above, you don't want to limit yourself to one or two lenders. Explore all of the opportunities, as you may unexpectedly come across a surprising, beneficial deal. Furthermore, Phil Reed, a consumer advice editor at Edmunds.com, told BankRate that some lenders may view your bad credit as a positive. "That's where it becomes more important to shop around," he said. However, on the flip side, you'll want to be wary of these lenders who only hand out loans to subprime customers. "Seeing places that are appealing specifically to subprime is a little bit of a warning flag," Reed noted. Where do you start? The experts suggest exploring your local options, like a bank or credit union. You'll have a better chance at a bank where you already have a checking account. Furthermore, BankRate.com suggests seeing if your employer or insurance companies will offer any automotive financing. Finally, the website recommends targeting businesses that are known for handing out auto loans (as opposed to those who cater to "low-credit clients"). Bring a Friend Consumer attorney Yvonne Rosmarin told BankRate.com that it's best to bring another person when you're shopping around for auto loans. There are two reasons for bringing along a partner. First, you can rely on this person as an "extra set of eyes and ears," and if they know anything about credit or loans, they can give you some unbiased insight. Furthermore, this person can help play a "role" during your negotiations. The website suggests having your friend act "unimpressed, dubious, or critical" of the loan, which may influence the lender to offer better rates. As we've outlined above, there are several ways to snag a beneficial car loan, even if you have bad credit. You certainly shouldn't limit yourself to only a couple of lenders, and you shouldn't be settling for anything less than the best possible deal (although, with bad credit, that's going to be difficult). Use our guide above, and you shouldn't have any issues securing the best possible payment plan.

Buying a used auto is typically about making the right choice for your lifestyle to match your available budget. This can be difficult, and may require a consumer to sacrifice certain aspects of their ideal vehicle in the interest of saving money or getting other features that are more important. For many drivers this also means choosing practicality over all else, since it seems more worthwhile to invest in a sturdy, albeit less-than-exciting used model for the sake of getting your money's worth. Fortunately, this isn't your only option. While many drivers and used car buyers may not realize this, your options for a used vehicle are actually much broader than you may have previously realized. This means you don't have to simply settle for the most practical, affordable model you can find, but that you can actually find a decent used vehicle that will still turn heads as you roll by. The next time you're looking at bad credit car dealerships for your next car, here are a few impressive models to keep in mind that you will still be able to afford with a small bad credit loan. The following are some high-profile models from years gone by that you can find now for under $5,000. If you have bad credit and can't secure a good loan, or you want a nice, sporty model but don't want high monthly payments, then these might be just the models for you. 2002 Chevrolet Camaro A classic model with a reputation for performance known worldwide, the Camaro is typically the stuff of legends for used car buyers, relegated to the custom garage lifts and museums of hardcore collectors or super wealthy car lovers. This, however, is only true of the most recent model. With just a little bit of research, you too can find an excellent Camaro with about 100,000 miles on it for under $5,000. Boasting a 3.8L V6 engine capable of 31 miles per gallon highway to match its sleek, sporty appearance, the 2002 Camaro is a solid model for the car lover looking to save a little green without sacrificing any of that burning rubber. 2005 Mazda Miata Having become nearly synonymous with sporty performance, one might be surprised to find such an affordable Miata anywhere. Luckily, they seem to be widely available, and often surprisingly affordable. Plus, boasting a 1.8-L 4-cylinder engine capable of up to 28 miles per gallon highway, the 2005 Miata is a fully capable sport model ready and waiting for the eager driver looking for a great deal. 2000 Jeep Wrangler Jeeps are famous for lasting forever with proper maintenance, and with just a little bit of searching you too can easily find any number of used Wranglers out there for an affordable price. Chances are, some will even have accessories or upgrades already built in, meaning more options for you as a buyer. And since a Jeep can rack up thousands and thousands of miles before giving up, you can be secure even buying a Jeep with 200,000 on the odometer. 1989 Chevy Corvette Or, for a serious way to put your money to good use, you can step back in time and be the coolest guy at the party with your 1989 Chevy Corvette, a classic muscle model complete with flip-up headlights and that classic boxy '80s look. If you're looking to seriously step up your game on the curb without breaking the bank, consider an old Corvette like this one - still guaranteed to turn heads even all these years later. As you can see, used car buyers are not quite as limited as it may at first appear. Sure, you may be tempted to go with something practical for your money, but it's good knowing these options are out there waiting. Somewhere there's a gently used pony car at a great price waiting for you - you just need to have your eyes open to find it.

If you have bad credit, chances are you will have a harder time finding financing for a car. What you might not be expecting are the high interest rates associated with bad credit auto loans. The interest rate is what makes paying off a bad credit car loan such a financially difficult endeavor, but it isn’t impossible. Even though you might not know exactly what your monthly interest rate will be, there is still a way to get a better idea of how much it will be. Note: There is really no way for you to know how much your interest rate on a bad credit car loan will be until you apply for financing, but you can still get an idea by using any type of car loan calculator. Two Rates Make One Before we jump into the calculating though, it’s important to understand there are two kinds of loans that make the total monthly rate on the car. The APR and the interest rate (or note rate), the ladder of the two being what will jack the monthly rate up if you have bad credit. APR The APR is the higher of the two rates and reflects the total cost of financing for the vehicle per year. The APR also covers things like GAP insurance, protection plans, the taxes owed on the purchase, etc. Basically, anything to directly do with the purchase of the vehicle. Note Rate The note rate represents the cost of borrowing money per year, including fees or interest accrued. Essentially, this has to do with the loan portion of the vehicle, which is where the higher interest rate on a bad credit auto loan comes from. In the end, these both add up to equal the total cost of what you will be paying monthly. It’s just important to understand the difference between these two monthly rates, so you know where the added expense is coming from. How To Calculate for a Bad Credit Car Loan First, you need to take a look at your state’s average bad credit auto loan interest rate. Since each state has a different interest rate on bad credit car loans. Some states can be around 10% and others all the way up to 19%, and figuring that out first is important. Now, take that state’s average bad credit auto loan interest rate and plug it into an auto loan calculator. Then, create a mock price of a car you think you can afford, let’s say $15,000, and plug that into an auto loan calculator along with the length of the car loan and the sales tax. Example: For a $16,050 car with a sales tax of 7% and a APR of 19%, your average monthly payment would be 416.35. Over 60 months you would have ended up paying $24,981 total on that car. It’s Not Precise, But it’s Close Enough While this might not be a direct representation of how much interest you will pay monthly on a bad credit car loan, it’s still an accurate one. Bad credit auto loans fluctuate from credit score to credit score, and you won’t know what score matches up to what monthly rate until you get approved for financing. But, at least this way you can start preparing early. Also, the higher interest rate you put in, the more prepared you will need to be. Giving yourself incentive to save up even more, and ensuring that you are ready to pay off whatever comes your way.

If you happen to find yourself in a tough financial situation - whether it's because of previous or current debts owed or bad investments, a job loss or particularly bad credit - the prospect of taking on an extra financial burden can seem pretty daunting. Spending a lot of money, or taking out a large loan, might seem like too heavy of an expense to take on, or too heavy of a financial burden to carry - and rightly so, especially if you are in your situation because of borrowing troubles in the past. Fortunately, there is still a relatively safe, manageable kind of loan you can take out to not only improve your immediate quality of life but also to help jumpstart your financial situation toward positive growth. These, of course, are bad credit car loans, which are typically available even to bad credit borrowers and can seriously help get your finances back on track for good. If you're still not sure about how you can use a bad credit auto loan to help revive your credit score, here are a few reasons why a bad credit car loan might just be the perfect kind of investment for you. Easy to Secure Compared to other kinds of loan agreements, bad credit car loans are relatively easy to secure - especially for bad credit borrowers. These loans are really directed toward those with credit too bad for other lenders, and exchanges the borrower's trust with a higher interest rate. This means that bad credit car lenders stand to make slightly more off the deal than standard lenders, and so they are more willing to work with those with less than stellar financial situations. A quick and easy approval can also help mitigate further damage to your credit score, as rejections can be reflected on your score and too many could be a red flag to future lenders. By doing your loan shopping within about a two week period and limiting the number of lenders requesting credit checks, you make sure that your credit score will not reflect multiple rejections from other lenders. An easy approval means only one request, and less of a chance of facing numerous rejections. Besides, many times these loans are set by the used car dealers themselves, meaning you can simplify your car buying and financing experience into one easy stop. Plus, by having an idea of what you're looking to pay and how much you can handle per month, the smart dealer can direct you toward a car that's perfectly suited to both your tastes and your price range - helping you avoid getting into a deal you really can't handle, and ensuring you get the best of what you want out of your bad credit car loan. Can Help Your Bad Credit Taking on a loan and paying it back responsibly is the absolute best way you can rebuild your credit, and this goes or those with bad credit as well. By taking out a bad credit car loan, you allow yourself to prove to the lender and all future lender that no matter what may have happened with your finances in the past, you can now be trusted as a responsible borrower who will make payments in full and on time. In this way, taking out a bad credit car loan could actually be the life preserver that saves your credit score from the depths. Being easy to secure, they offer a fairly democratic way to rebuild your financial portfolio in a positive and attainable way. Usually Relatively Affordable Bad credit auto lenders recognize that their customers are not in the best financial situation and so most of these loans are directed at those who cannot afford heavy monthly bills or egregious down payments. These loans are typically adjusted to fit your budget on the understanding that you'll be paying a higher interest rate, and thus a higher amount over a longer amount of time. By keeping your monthly expenses low, however, you give yourself a better chance of being able to better juggle your month-to-month finances and get yourself back on solid financial footing. This is especially important for those trying to rebuild credit, as making monthly payments on time is critical to the credit building process. In this regard, it may actually be worthwhile to pay the higher interest rates now if it brings the ability to secure better interest rates down the road. Once your credit is built back up a little, you can likely refinance your loan for lower rates or lower monthly payments to further increase affordability. Comes With Capital (A Car) Perhaps one of the greatest benefits to taking out a bad credit car loan is that, unlike other financial investments, this loan comes with very tangible capital: the car itself. More than just a bargaining chip, a car is a highly useful tool that can help you find a job, get to work, and live your life. By taking out a bad credit car loan you not only make an investment in your financial future, but in your personal potential as a functional member of society as well. Having this kind of annuity under your ownership only further proves to investors that you can invest intelligently and will definitely help your credit standing. Not A Super Long-Term Investment Perhaps most attractive to bad credit borrowers is that taking out a bad credit car loan is not a very long-term investment. At most, you'll probably find a five- or seven-year loan to be the average length, with the cost of the car and interest spread either fairly evenly throughout or set up as a balloon payment for later in the loan term. Because you're not investing for decades, you likely will not feel as though you're trapped under the loan for the rest of your financial career. Besides, it's always a positive step to set an attainable goal for yourself financially, and setting yourself up to be in a better situation in five years or so is definitely a reachable sight to set. It's not too hard to imagine how someone finds themselves in a bad credit situation. Whether from late bill payments, a foreclosure or bankruptcy, a stolen identity, or even from defaulting on a previous loan, your bad credit can follow you for a long time - but that doesn't mean it has to rule your lie, and determine what you can and can't have for your happiness and comfort. By taking a few simple steps, like taking out a manageable bad credit car loan, you too can begin the healing process for your bad credit. With a bad credit car loan, you give yourself an easy way to prove your fiscal responsibility, and you get a car out of the deal. As far as smart financial moves go, it could definitely be a lot worse. If you, like millions of Americans, are facing bad credit and are tired of hearing rejection after rejection from lenders, consider a bad credit car loan from a car dealer or lender near you. It could be just the thing to save your credit - and get you back on the road to financial freedom with confidence.

The interest rate on bad credit auto loans are typically much higher than those with good credit. Even though this is an unfortunate fact, there are reasons behind it. These reasons might not be considered “good reasons” in your book if you have or need to get a bad credit car loan, so let’s just call them “justified reasons.” Because while they’re unfortunate, they are still understandable if you step back and look at it from a bigger perspective. Here are a couple reasons, and a deeper understanding, as to why the interest rates on bad credit auto loans are so high. Good Credit vs. Bad Credit Interest Rate In 2015, the bad credit car loan interest rate was on a steady incline, and it’s a costly. Even though you won’t qualify at some places for 0% APR like a consumer with good credit, you still need to keep your head up. Shop around, find the best deal, the interest rate will fluctuate from dealer to dealer, allowing you at least a little bit of wiggle room when it comes to lowering the amount you’ll pay. The interest rate also fluctuates depending on what your credit score is, and you may not actually have bad credit at all. It always pays to figure that out before you go shopping around, that way you know what you qualify for. Even though it may fluctuate depending on your credit score, the fact of the matter is that if you have bad credit it doesn't matter what your score is; it’s going to be an expensive interest rate. A Big Difference The average interest rate is a big difference depending on your credit score. Obviously, the better credit score you have the better your interest rate is going to be. Typically, credit scores operate in a range from 301-850. A good credit score is considered to be anywhere from 700-749, whereas a bad credit score is anywhere below 600. Your interest rate in 2015 with a credit score below 501 would have been anywhere from 13.16% to 14.51%. Maybe even higher than that, and a little bit less if you are sitting between 501-600. The average rate is anywhere from 4-6% on a car loan taken out by someone with good credit, which means your interest rate is more than doubled if you have bad credit. But, why is the average rate so high? Because, You Have Bad Credit This isn’t me being funny or sarcastic, this is a legitimate reason as to why you have a high interest rate on your bad credit car loan. When subprime lenders like used car dealers or other independent organizations take on consumers with bad credit, it’s a two way street. What I mean is this: on one side of the street you are putting your faith in them to find you a loan for a reliable used car that you can afford. While on the other side of the street, they are taking on a customer with rocky financial history and trusting that you will actually make your monthly payments to the lender. Never thought of it that way, huh? A Security Measure For Them If you deal directly with a used car dealership, you will most likely be getting a loan directly through them. In turn, you will be paying them every month directly. They want cash, and generally don’t allow checks or money orders. This way, the only way for you to make your payment for that month is face-to-face at the dealership. This avoids any “my check is in the mail” or other prolonged excuses along those lines, which could ultimately end up with them losing profit on repossessing your car or another way; neither of which they want to happen. I know what you are thinking “but I’m not like that!” And I’m not saying you are, but the fact of the matter is, some customers with bad credit have a history of not being financially responsible because they don’t care enough. Therefore, this is the dealers security net for providing you with a loan. But, you can look at it as an incentive to make your payments on time. How is it an incentive? Well, if you make your payments on time and improve your credit, you are able to apply for better financing after that first loan is paid off. Which means the next loan you apply for will have a lower interest rate because of your new and improved credit score. If you miss payments, however, you will dig yourself even deeper into bad credit. So, look at it in a hopeful light. Even though this high interest rate on your loan is costly now, it won’t be that way forever if you keep up with your payments. Also, now that you understand the dealers are taking a big leap of faith as well, that might make cutting a deal with them easier to swallow. It’s the Used Car Dealers Source of Income Let’s face it, if you have bad credit there is a slim chance of you qualifying for a shiny new car, and no reason for you to. You should look at used car dealerships for something cheap and reliable without the bells and whistles, because all you need is something to get you from point A to point B. Which brings me to my next point; a more specific reason as to why a used car dealership might have such a high interest rate is because that’s how they make their money on the sale. Typically, the car they get is bought cheap from auction and sold at a lower price, but it’s still reliable and runs fine. It just might be a car that doesn’t sell very well or a minor aesthetic issue. Therefore, it would be hard for them to turn a profit on it under normal circumstances; but these aren’t normal circumstances. They are dealing with consumers who have no where else to go, and they need to keep the business open so they can keep people with bad credit on the road. Therefore, the only thing left for them to profit off of is the high interest rate. Without that interest rate from their customers, they would not be able to turn a profit and keep their business open for consumers with bad credit who desperately need a car. In Conclusion… While going through other lenders is an option, like a bank or credit union, these ones are typically tougher than going to a used car dealer. Most used credit car dealers understand your need for a car, and know how difficult it is when it comes to finding financing for one with bad credit. But, they are still a business. At the end of the day, they need a way to cover themselves for the cost of a repossession if you stop paying for your loan halfway through the first year. The interest rate can serve as payment for that. On top of that, the car they paid for doesn’t really have a high resale value, and they are dealing with consumers who need a reliable and cheap car to get them down the road. This puts them in an interesting situation: they need to figure out how to sell a cheaper car to a consumer whose only option is a cheap car, while still figuring out how to make a profit. The answer? A high interest rate. Even though it’s an unfortunate reality, just these two reasons behind why a used car dealer would have a loan with a higher interest rate are should lessen the pain a little bit. You can’t fault them for trying to cover themselves, and they still need to make a profit somehow.

Dealing with bad credit auto dealerships or other subprime lenders is an expensive process. But, if it’s the only chance you have of getting into a car, then you don’t really have a choice. You are going to be locked out of some deals and options that a person with good credit has, and it will be much more costly to finance a car with bad credit. While this may be the case, that doesn’t mean you can’t save some money. Explore Your Options You have multiple options when it comes to getting a bad credit car loan; you can find a dealer that specializes in dealing with consumers who have credit, check your bank/credit union (they may be a bit more difficult to get financing from), or go directly to a subprime lender. Shop around, and find the best deal. While being locked into what type of car you are going to get (because your bad credit will dictate that) you can still see who is going to give you the best deal on a loan. Also, don’t be afraid of the dealerships. That stigma that the dealerships have the worst deal when it comes to bad credit auto loans should be eradicated. On the contrary, the dealers will sometimes have the best deal when it comes to bad credit auto financing. Get Your Credit Score Your credit score will help the lender you are dealing with determine what type of car you can afford, so make sure you do it yourself. Make sure you get your credit score before you go shopping around for loans/financing. It’s important to know your score beforehand for two reasons. One: if you have too low of a score, you may not be able to get financing at all. Two: if you have too high of a credit score and go shopping for a bad credit car loan, you may be getting a deal you don’t deserve. Also, having this information beforehand will help prepare you for the deal that needs to be made. Shop Smart Speaking of interest rate, this is also one thing you can control… too an extent. The dealer or the subprime lender is going to show you the cars you can afford, not the ones you want. Which is understandable, that’s why they are there. But, if you are eligible for a car that is sitting around $18,000 and there is also a car available for $14,000, go for the one that costs less. It will still get you from point A to point B, and while you may not have a sunroof or heated seats, that’s okay. A lower priced car means a lower priced loan, which also means less interest paid overtime. Try too avoid getting an extended loan; this causes you too pay way more over a longer period of time because of the high interest rate. Pay Attention! Make sure you are alert when cutting the deal, while not all dealerships or subprime lenders include them, there are a few extra fees that could be added in to the deal you don’t need. The reason you are looking for a car at a bad credit dealership is because you can’t afford to get a good credit loan. That being said, don’t worry about warranties, paint protection, or any other added fees you don’t need. Again, you just need a car to get you from Point A to Point B. While you may not have full control over the high interest rate accrued while paying off your bad credit loan, that doesn’t mean you are at a complete loss while trying to save money. Just shop smart, pay attention, and make sure to make your payments on time, and your loan will be paid off before you know it.

Getting a car with poor credit is tough, but not impossible; it just takes some research and a little extra elbow-grease. You aren’t just locked into getting a bad credit car loan one way, either. You do have some options out there. A common way is to find bad credit auto dealers, which are dealerships that specialize in financing consumers who have bad credit. If that doesn’t work for you, another option is finding a sub-prime lender. Which is an independent company that specializes in auto-financing for those who have bad credit. Your bank or credit union is another option; credit unions being the more lenient of the two. Before you begin thinking about your options though, you need to understand what you are getting yourself into, and if you are even eligible for one. What’s a Bad Credit Auto Loan? A bad credit auto loan is essentially just like the other loans out there; you find a lender, apply for a loan, and if you are eligible you get a loan/new car. But in this case, the interest rate is much higher. While typical car financing will have around a 5% interest rate for those with good credit, the interest rate for a bad credit consumer could be anywhere from 13% to 19% depending on where you live. It’s important to take this into account when looking for financing options, because the interest rate will be costly. Am I Eligible? You need to find out if you are even eligible; it’s important. Even if your credit score isn't stellar, that doesn’t mean you should go looking for a bad credit car loan. Poor credit is considered to be approximately anywhere between 300 to 550, and subprime credit is between 550 to 620. If you fall anywhere in these categories, you should apply for a bad credit car loan. If you don’t, you should avoid applying. Why? Because you would be getting an interest rate that is much higher than you would if you went for standard financing on a car. Also, it’s important to note that if your credit score is too low, you won’t get approved. Dealing Directly With Dealerships There are dealerships out there that specialize in bad credit financing, you just need to look for them. They will generally have a person at the dealership (or connections) that specialize in dealing with consumers who have bad credit. This bad credit auto dealer is somebody who specializes in finding the car that you can afford, not one that you want. With this option, you will be putting your faith in the specialist’s hands to find you a car that will be able to reliably get you down the road. While they will give you the car that you can afford, that doesn’t mean you can’t bargain for less. If you get a car that is $18,000 with a sun roof, but there is also one eligible for $15,000 that runs just as well, go for the lower costing car. Why? Because a lower cost means a smaller loan, and that means less interest paid in the long run. You would think you are stuck getting a used car, but you can get a new one as well. There are different bad credit auto dealers out there that sell used or new cars, and they both have ups and downs. A newer car is, obviously, going too cost more than a used car. So, if you are looking to get on the road at a cheaper price, try and find a used dealership. If you want a car that will be more expensive, but probably last you longer than a used car, then try and find a new car dealer. Dealers will typically advertise if they have bad credit auto financing, so make sure you look for signs like “Your job is your credit!” or “Bad credit? No problem!” Whether you choose to go to a new or used car dealer, you need too make payments on time. It’s much easier for the dealership to repossess your car than it is for somebody to repossess a house; they know it and you should know it. If you don’t make your payments on time, chances are they won’t be too lenient when it comes to letting you drive around. This is because you have bad credit, and to them, letting you borrow the car is a risk factor. It’s perfectly reasonable for them to use the car as collateral, so make sure your payments get in on time and show them you are financially responsible too avoid any issues. Subprime Lenders Sub-prime lenders are another route you could take, and instead of dealing directly with the dealership, you would take out a loan through them. Subprime lenders specialize in lending to consumers who have bad credit history. Much like dealerships, you are dealing with high interest rates while paying back a loan and the possibility of repossession. Unlike dealerships, a subprime lender might be more willing too work with you. I’m not saying dealerships are stubborn, but when you are looking for a subprime lender they are expecting you too walk through that door, it’s what they do. You are bypassing the dealer and going straight to the source in order to apply for a subprime loan directly. What these subprime lenders do is sit you down and discuss your credit score, they then show you some options and talk to some dealers they are affiliated with. Sometimes this is good, sometimes this is bad. A subprime lender can act as a helpful middleman, or they can cut you a bad deal. Typically, these lenders are considered a last resort, and most people would rather deal with the dealerships. With these types of lenders, it’s important to have both your eyes and ears open, and if something sounds fishy then call it off. It also wouldn’t hurt to have another set of eyes and ears with you for another reason. Co-signing Having that second person there is a great way to make sure you get the best deal possible, and with nothing extra tacked on. This person is also a great way to help ensure you get a loan from a subprime lender or financing from a dealer. They can be your co-signer if need be, but this needs to be taken seriously. Only have them be a co-signer if you are sure you will be able to endure the duration of the payment plan. If you do not pay off the loan fully or miss payments, then you are putting the co-signer at risk. Since they put their reputation on the line for you, their credit score will also suffer. They may even be required to pay off the rest of your loan. Banks/Credit Unions Even if you don’t think it will work, check with your bank. The banks understand your financial habits better than anyone, and you may be able to get a loan from them. Even more lenient than a bank is a credit union; their qualifications aren’t nearly as high for someone looking for a loan, and are even easier on members. I’m not saying it’s going to be a walk in the park, but it’s worth a shot to at least check with your bank. There are plenty of options out there for bad credit auto-financing, and you may need to be a little more alert and work harder than a consumer with good credit, but it’s possible to get a car with bad credit. Dealerships are popular because they are able to do most of the work for you, and if that isn’t an option you can always look online for one of the numerous subprime lender sites out there. A bank or credit union might be a little tough, but it’s worth a shot; and only consider a co-signer if you know for a fact you will not compromise their credit. Don’t feel locked into one route, it’s up to you, and you can explore all of your options before making a decision.