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Getting a used car loan with bad credit is as easy as getting approved for a loan with good credit. Because automobile loans are collateral-based
many auto loan lenders approve loans to persons with bad credit.

There are pros and cons to obtaining financing with bad credit. A primary disadvantage involves higher interest rates. However
there are ways to avoid paying more for a used vehicle financing. Here are a few tips to help you get approved.

Consider Using a Co-Borrower

Getting approved for an auto loan with bad credit or no credit history is not difficult. In fact
auto loan companies regularly offer financing to persons with low credit scores. Loan interest rates are primarily based on credit score. Obviously
those with excellent credit qualify for very low rates. On the other hand
if you recently filed bankruptcy
have a previous repossession
or bad credit
low rates would be a miracle.

Fortunately
there is an easy way to obtain a low rate auto financing with bad credit. This involves applying for the auto loan with a co-signer or co-borrower. Co-borrowers are beneficial for several reasons. To qualify as a co-borrower
the person chosen must have a strong credit history. Because they become responsible for the car loan if the primary borrower is unable to make payments
using a co-borrower will help buyers acquire a lower rate.

Apply for the Auto Loan with a Down Payment

Another approach for obtaining a lower rate on an auto loan entails applying with a down payment. Down payment amounts vary. A good down payment generally consists of 10%. Still
individuals with extreme credit problems may be unable to obtain a low rate. In this case
having a down payment will lower the amount financed
which could create a more affordable monthly payment.

Gradually Improve Credit Score

Although credit scores will not improve overnight
little things may add a few points. For example
paying bills on time will increase your credit score each month. Furthermore
paying down credit cards will also add a few points. Settling past due and collection accounts is another way to quickly add points to your credit score. If considering financing a used car with bad credit
attempt the previous suggestions. This could make the difference in acquiring an auto rate of 12 percent and 9 percent.