Lenders, in these days of cut throat competition in the loan marketplace, are bound to give loans to bad credit people. And so finding a loan with a bad credit tag is not at all tough for borrowers. You can also ask for a loan for buying a car as well. There are lenders who have bad credit car finance to enable you buying a car of your choice. All borrowers with past payment mistakes like making late payments, having arrears or even defaulting on payments as a result of which county court judgments may be in their name can take bad credit car finance.
To cut risks, the lenders may ask borrower to furnish some security of the loan. So in taking Bad Credit Car Finance you should be ready to provide collateral to the lender. Your home, any asset or even the very car you are buying can be pledged as collateral. The advantage of secured bad credit car finance is its lower interest rate, depending on your credit score. If your credit score is not so low than the lender will give loan at better rate than for a very low score.
But in case you do not want to risk property, unsecured bad credit car finance is what you can rely on. But due to risks, lender will charge interest at even higher rate. The loan will be smaller. Either secured or unsecured loans they are of shorter duration ranging up to 5-7 years.
As far as bad credit is concerned, you are required to satisfy lenders about your ability to repay the loan in timely manner. So your income, bank statements and employment records are looked upon by the lender prior to approving the loan. Make sure that you have taken your credit report and checked it for any errors. Better improve credit score by clearing some easy debts before applying for the loan to get it at better rate.
You are also supposed to make down payment. So you should be enough money in your hands before applying for the loan. Make at least 20% of the car purchase price as down payment for a beneficial deal. Such a down payment also is useful in taking bad credit car finance at lower rate of interest. And buy the car from the dealer that is known for quality cars. Also you should make sure that your loan repayment is reported to the credit agencies so that your credit score improves.