In an ideal world, you would have time to improve your low credit score before trying to get a car loan. However, things happen, and you may find yourself needing a car immediately with bad credit. Unfortunately, there are many myths out there about bad credit and auto loans. This makes people fearful and nervous about trying to get a bad credit auto loan. Here are a few of the most common myths surrounding bad credit and auto loans and the truth surrounding these myths.
You Can't Get an Auto Loan With Bad Credit or a Bankruptcy
One of the biggest myths out there is that you cannot get an auto loan with bad credit and/or a bankruptcy on your credit report. This is not the case at all. While it used to be much harder to get bad credit auto loans, lenders now realize that a lot of people with bad credit can afford a car. As such, lenders look at many factors beyond just your credit score, such as your income and how long you have been on the job. As long as you have a stable job and enough income to cover the monthly cost of the car, you should have no problem qualifying for a loan.
Your Interest Rate Will Be Significantly Higher With Bad Credit
Another myth is that your interest rate will be significantly higher if you have poor credit. While you can expect to pay a higher interest rate with poor credit, the rates may not be as high as you think. Bad credit auto loans are becoming more competitive, and as such, lenders are cutting rates to entice potential buyers. Taking your time to shop around and compare rates will help you find the best interest rate for your bad credit auto loan.
You Can Only Get a Clunker With Bad Credit
The last myth surrounding bad credit and auto loans is that you can only get a clunker with bad credit. Many people equate bad credit auto loans to the shady dealerships who used to specialize in these loans 20 years ago. These days, all dealerships offer some form of bad credit auto loans, including the top ones in your area. As such, you are able to get a reliable vehicle, often with a warranty, even if you have poor credit.
Having bad credit is not the end of the world when it comes to getting an auto loan. While you should attempt to improve your score as much as possible, if you have the time to do so, you will still be able to get a loan for a car with bad credit as long as you have a stable job and enough income. Take your time to shop around and compare rates to help you find the best bad credit auto loan for your needs.