Qualifying for a Bank Car Loan With Bad Credit

Bank car loans are extended to borrowers based on the merits of an application including a borrower's credit score, salary and financial stability among other factors. If you have bad credit, you need to make your application shine in other ways to show a lender you are worth the risk.

Provide Collateral

Collateral, such as another vehicle, is a great way to secured a loan at a lower interest rate. You must be wiling to forfeit the item in case of default. However, a secured loan is always cheaper than an unsecured loan because it is less risky for the bank. 

Use a Cosigner

A cosigner may be able to lend you their good credit on an application. You can avoid having to opt for unfavorable interest rates, such as a sub-prime loan, by providing the guarantee of a cosigner. The cosigner's credit will be affected if you do not pay your loans.

Prepare Supplemental Materials

Supplemental materials may include character statements, employer references or letter explaining why your credit score is not as high as it should be. A lender will consider all of these materials when deciding the terms of your loan. Prepare any materials in a cohesive and well-presented package. 

 

 

 


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