It’s almost impossible to get around without a car these days. In fact, roughly 90% of Americans own at least one vehicle.
Since most people don’t have thousands of dollars laying around, however, the most popular route of purchasing a car is getting a loan.
But what if you have bad credit? Can you still get a car loan? If you do, how bad is the interest going to be?
These are very common and important questions to ask yourself.
In this article, we’re going to discuss 4 reasons why bad credit car loans might just be your best bet!
1. Begin the Healing Process
Your credit score can go from good to bad to worse in a matter of weeks. While it’s true responsibility and discipline go a long way in terms of credit scores, it’s not always the cause of bad credit.
Regardless of your situation or why you have bad credit, procuring a bad credit car loan can begin the healing process for your credit score.
Consistently and religiously paying a car loan will slowly rebuild your credit score and proves responsibility and dedication to future lenders.
2. Quick and Easy
One of the best things about bad credit car loans is how effortless they can be to obtain.
Unlike traditional car loans, there are no long approval processes or wait times. Most of the time, used car dealers will offer their own loans, saving you from making extra trips back and forth to the bank.
Additionally, with bad credit car loans, you are almost guaranteed approval for your loan. This has a dual effect. First, you get to take the car home – an obvious plus.
Secondly, repeatedly applying for loans and be rejected will actually cause more harm to your credit score. Future lenders will see that you have a history of failing to meet loan standards.
3. Light at the End of the Tunnel
While bad credit car loans come with a higher interest rate, which can be intimidating, there’s light at the end of the tunnel.
Those interest rates are what you put forward as collateral since the lender is taking a “risk” by giving you the loan.
However, most of these loans come with low payments and are generally five to seven-year contracts. Additionally, as you continue to get your credit score back on track, you may be able to refinance the car a couple of years down the road.
The best advice for getting a bad credit car loan is to choose a low-end car that you can pay off quickly, rather than a new or expensive car.
4. You Can Use This Investment to Improve Your Situation
A built-in benefit of getting a bad credit car loan is the immediate improvement of your situation – you are no longer carless!
Most jobs applications ask if you have a reliable mode of transport to get to work each day. They need to know you can be there on time every day.
If getting to work was never a problem, it’ll just be much easier now!
Bad Credit Car Loans, Payday Loans, and Personal Loans
At Bonsai Finance, we know life can give you lemons. However, we don’t believe it means you shouldn’t be able to get a car loan or any other loan you need to make your life better.
Come see what we can do for you! Here are some other articles you might find helpful: