Whether you have good credit, bad credit or no credit, it is usually possible to get financed for a used automobile. However, you may need to make concessions to get approved for a loan if you have less than stellar credit or don’t have a credit history. Typically, this means accepting a higher interest rate or making a down payment.
The good news is that neither of these terms have to put a reliable automobile out of reach. A down payment could come from a friend, family member or even your employer if you don’t have the money yourself. If you have a vehicle, it could be used as credit toward the purchase of your next vehicle.
To lower your interest rate, you can ask somebody to co-sign on the loan with you. This provides additional security to the lender that the loan will be repaid even if you don’t make the payments yourself. Doing so can reduce your interest rate significantly, which will lower your monthly payment as well. To further reduce your interest rate, you may be able to refinance in the future, which may also take the co-signer off of the loan.
If you are planning on getting financed with questionable credit, be sure that you can prove that you have a steady job and paycheck. Doing so may make it easier to get a lender to agree to finance the purchase at an affordable rate and loan term.