Car Loans and Bad Credit
People can wind up with bad credit for a lot of reasons. Sometimes it’s pure money mismanagement and poor decision-making skills; other times, it’s s matter of simple misfortune. Whatever the case may be, having bad credit can definitely make your life difficult. Some banks or other lenders will not want to give you any kind of car loan at all, while others who claim to specialize in bad credit car loans wind up charging you so much interest, you can barely afford the payment. This can turn into a vicious cycle of late payments, which will only make your credit become worse and worse.
Using an online loan calculator is one way to prevent this from happening. Many lenders have loan calculators on their own websites to help you determine exactly how much you’ll need to pay on a car loan every month, depending on purchase price, interest rate, and duration of loan. If you know how much the car is you want to buy, and you know approximately how much the interest rate is going to approximately be, then you can do these calculations yourself. If the payment amount looks too high, then start thinking about the cost of registration, insurance, gas, and maintenance, which can add hundreds of dollars per month to what you already owe.
If you aren’t sure what your interest rate might be, you should do two things. First, you should order copies of your credit reports and scores from the credit bureaus. It’s impossible to really know what kind of bad credit car loans you can obtain without knowing your credit scores. Second, apply for a car loan through a reputable lender or bank, even if you haven’t made a final decision on the kind of vehicle you want. Some banks offer the ability to apply online, and get an instant decision. If approved, you will be given the interest rate at that time, which you can use as a ballpark number for your calculations.