Vancouver is an expensive place to live, causing many to experience financial difficulties and obtain poor credit ratings. If you have a bad credit score but need to apply for a car loan, you may wonder how to qualify. There are a few steps you can take to be an appealing candidate to lenders, and some you’ll want to avoid.
Below, we’ll discuss the do’s and don’ts of applying for bad credit car loans in Vancouver and how Auto Loan Hub can help you secure approval. Keep reading to learn more!
What to Do
If you have a bad credit history, getting approved for a car loan likely feels impossible. But don’t worry— you’re not the first driver with a low credit score, and many lenders provide avenues for approving applications with low credit attached.
Lenders will always be wary of applications from drivers with low credit scores, but taking the steps below can help make you a more appealing and trustworthy candidate:
Know Your Credit Score
You know your credit score is low, but how low? Is there any way you can raise it before applying for a loan? Order a copy of your credit report through a trusted agency and contest anything that might falsely lower your score.
Even if you can’t get it raised before applying for a loan, knowing your score ahead of time will give you a better idea of the interest rates you’ll be expected to pay. This will help you budget your down payment and monthly loan payments.
Consider a Cosigner
Lenders may be more willing to approve your loan if you find a responsible cosigner. If an unprecedented event causes you to miss a payment, your cosigner will be responsible for paying the balance owed. A cosigner with a good credit profile and financial stability lowers the risk for the lender and displays your responsibility by having a contingency plan for your loan.
Save for a Bigger Down Payment
If you don’t need a vehicle immediately, try to save up for a larger down payment. The more you pay upfront, the less you’ll have to pay in monthly increments. The higher cost upfront will save you in the long run by lowering your interest rates and creating a more sustainable monthly payment for your income.
What to Avoid
For every right step, there’s a wrong one, especially when handling finances. Here are a few pitfalls you should avoid when applying for bad credit financing:
Go Outside of Your Budget
The temptation to buy the newest and most expensive vehicle on the lot is strong for many drivers, but to ensure you can keep up with your monthly payments, set a budget and stick to it. Used and like-new vehicles are a great option for drivers with a low credit score, as they won’t have the balance or high interest of a brand-new vehicle. Opt for a vehicle price that won’t put you in dire straits if unexpected payments or financial stressors arise.
Sign a Blind Agreement
Read all the fine print on your loan agreement before signing it. Some lenders may include hidden costs like processing fees and early redemption costs. Be as thorough as possible so you know exactly how much you’ll be expected to pay.
Avoid Predatory Lenders
Unfortunately, some lenders target borrowers with low credit scores. Trust your instincts if an offer looks too good to be true for your financial situation. Avoid overly attractive offers and lenders who try to expedite the process without a thorough consultation.
You can find trustworthy lenders through Auto Loan Hub. Our experienced team will help you locate a lender with reasonable terms that suit your needs and budget, with full transparency of what you’re signing on the dotted line.
Get Pre-Approved for a Car Loan with Auto Loan Hub
If you’re looking for a bad credit car loan, partner with our team at Auto Loan Hub. We offer a hassle-free loan preapproval application process. Within minutes, you can determine whether you qualify using our application portal. We’ll do a credit score-friendly check of your finances with our Equifax-powered tool, and from there, we’ll contact you for a proper consultation.
Visit our How it Works page to learn more about our process. You’re just a few steps away from a pre-approved bad credit auto loan!
