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I’ve got a bad credit history – can I still get a car loan?
Many people know what a nightmare it can be having to put up with an unreliable vehicle, and being able to purchase a newer, more reliable, and most importantly, safer vehicle can be such a relief.
But what about those with a bad credit rating? There are options open for those with bad credit when it comes to car finance and loans. This includes:
- Getting finance directly from a dealership that specialises in vehicles for those with bad credit.
- Opting for a secured loan if you are a homeowner.
Finance options for those with poor credit
Getting into debt, missing repayments, and ending up with a tarnished credit history and poor credit rating can be all too easily done, and this can prove to be a huge problem when it comes to taking out finance in the future.
Those with poor credit will find it difficult to get unsecured credit in most cases, and will often end up paying way over the odds in interest on finance deals that they can get.
However, there are some options open for people with bad credit that need to get finance for a new or newer car, although the interest rates that you pay as a bad credit customers may be considerably higher than those paid by consumers with a good credit rating.
However, these options are still valuable if you need to purchase a car and do not have the money upfront.
One option open to those with poor credit who wish to purchase a vehicle is a specialist dealership. There are a number of specialist dealerships that are able to offer finance on newer vehicles to those with poor credit, although this will of course mean purchasing the vehicle from that dealership.
However, the cost of borrowing through a dealership can work out to be very expensive, particularly when borrowing from a dealership that specializes in bad credit finance for vehicles.
A more affordable option for those with bad credit that need to get a loan for a car may be taking out a secured loan, which is a loan that is secured against the property.
In order to do this you will need to be a homeowner, as although you can get unsecured car loans most lenders will only consider those with a decent credit rating for unsecured finance.
As a bad credit borrower you are more likely to get a secured loan in order to purchase your car, although you may find that the interest rates that you pay on your loan will be higher than those on loans for borrowers with good credit.
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