Can I Get a Car Loan With Bad Credit?

bad credit car loans

Are you thinking about bad credit car loans? Some questions may be running through your head.

Can I find quality used cars near me? Will I find a car dealer in Janesville that will work with me? Can a dealer connect me with a lender who will work with my situation?

The answer is yes to all of the above. You can find used cars that are practically brand new.

You can also find a dealer who understands your plight and will connect you with a suitable lender. Many lenders offer easy loans for those who need quality cars. 

When it comes to auto credit, finding a few quality lenders is paramount. Avoid applying through many lenders at once, as excessive pulls on your credit will drag down your score.

This article will give greater insight into auto loans. Let’s explore. 

Down Payment

To get a car loan with bad credit, a higher down payment may be necessary. To increase your down payment funds, set aside some extra money each month. 

To compensate for poor credit, you can pledge a higher sum to reassure lenders. Pricier down payments will offset risk on the lender’s end, bolstering your chances of approval. 

Further, a high down payment can lower your interest rate, especially if you must pay a higher interest rate due to your poor credit score. 

Know Your Credit Score 

Even though you’re aware of your bad credit, you should still check your credit profile. Your credit report may contain errors that are hurting your score.

If you find an error, contact the credit agency to report the error. Additionally, you may find areas where you can make immediate improvements. 

The following factors can lower your score:

  • Making late payments
  • Spending beyond your credit minimum
  • Opening too many credit accounts

Before applying for a car loan, avoid opening new loans or credit cards. An auto lender will fear that you’re taking on too much debt at once. If you have high debts, try to reduce your balances as much as possible to boost your score.

If you take the time to increase your score, you’ll be in a better position when applying for the loan. 

Determine Your Budget 

Knowing what you can afford to pay each month will help you avoid default. Consider the interest rate when assessing the payments. You can use a loan calculator to determine how the rate will affect your monthly payments.

If you don’t want to use a loan calculator, the lender will go over the interest rate and payment plan.

Before applying, however, determine the maximum payment you can afford to pay each month. This will help you find a vehicle that’s within your budget. When assessing your payments, don’t forget to factor in the cost of monthly auto insurance. 

To stay within budget, consider used cars. Used cars usually have lower payments.

That said, do your due diligence when used car buying. Before buying the car, for example, you can ask the dealer if you can take the car to a mechanic of your choice for a thorough inspection.

A vehicle inspection will alert you of any repairs. Unexpected repairs can hurt your finances and cause you to be late on your payments. 

Have Your Documentation Ready

Many auto lenders will overlook bad credit if you have sufficient income. Gather any income documents such as paystubs or bank statements. 

You can also provide a letter of employment. Besides income statements, you should bring the following:

  • Phone bill
  • Driver’s license
  • Utility statements

Having all these documents in place will expedite the process and prevent delays. 

Find the Right Lender

Bad credit borrowers tend to take the first offer on the table, thinking they have no other options. This is a mistake. Research each lender to find the right one for you. 

You may encounter predatory lenders who charge exorbitant interest rates. May low-credit applicants accept high-interest loans out of desperation. You can find reputable lenders that will give you a fair rate despite your credit troubles. 

More importantly, make sure the prospective lender has a good reputation. Read online reviews about the organization. 

When finding the best lender, find ones that specifically cater to bad credit applicants. If the lending institution doesn’t advertise its friendliness to low credit borrowers, you may want to look elsewhere. 

The best place to find a lender is through a local dealership. Find a local dealership that will work with borrowers regardless of their credit history. These dealerships have lenders that will work with borrowers of all credit profiles.

Shop for the Best Price 

You may think that beggars can’t be choosers if you have poor credit. This is wrong.

Even with poor credit, there may be a lender willing to offer you better terms. One example is the length of the loan.

A shorter loan term is better for low credit borrowers because you’ll pay less interest over time. Plus, a short loan will decrease your chances of default. Longer loan terms have lower monthly payments, but you’ll pay more in interest.   

What’s the Best Way to Get Approved for Bad Credit Car Loans?

To get approved for bad credit car loans, document your income substantially. A solid income stream can compensate for a bad score. Also, be prepared to pay a higher down payment to offset your lower score. 

Remember this: you’re still in a position to shop around and find the best lender despite poor credit. 

Are you looking for cars for sale in Janesville? Click here to learn some smart buying tips.

What to Look For When Buying a Used Car

car buying guide

Buying a used vehicle is more prudent than purchasing a brand new model. You can save a ton of money by avoiding the rapid depreciation rate of new cars. Did you know a brand new car can lose as much as 30% of its original value in the first year?

However, when buying used cars in Janesville, you need to know what you’re looking for. After all, used or not, a car is still a major investment. If you’re like most people, you’ll need to take out a loan and commit to monthly payments. 

Check out our used car buying guide for everything you need to know about buying a pre-owned vehicle. 

Affordability

First, you need to think about your monthly and yearly budgets. As noted above, you will save a ton of money by searching for “quality used cars near me.”

The question is, how much can you afford to spend each month on loan payments? However, you also need to ensure you’re qualified to take out the loan. Fortunately, you can get approved online to see where your car credit stands. 

Finally, consider all of the other costs involved in owning a vehicle. You must also consider:

  • Fuel
  • Auto insurance
  • Registration
  • Maintenance/repairs

Dive into your monthly cash flow to find out how much you can comfortably afford to spend.

Seller Credibility

Choosing the right seller is next on our car buying guide. You need to make sure the party you’re buying the vehicle from is a credible seller. 

While you can save money by buying from a private party, there’s no guarantee or safety net for your purchase. If the car breaks down a few days later, there’s no certainty that you can get your money back. In other words, buyer beware. 

We recommend buying from a trustworthy used car dealership that has a positive reputation in the community. Dealerships are held to a higher standard because they are a local business governed by the state. They also have in-house mechanics who can give the vehicle a once-over before you buy it. 

Mileage

If you’re looking for the best used cars in Janesville, you also need to think about the mileage of the vehicle you’re buying. More mileage means lower price tags. However, the more miles a vehicle has on it, the more maintenance it’s going to need. 

That being said, don’t shy away from a vehicle that has a lot of mileage. If it was properly maintained, it should run smoothly and be just as reliable as a newer model.

Vehicle History Report

This is where vehicle history reports fit into our used car buying guide. Whether you’re buying from a car dealer in Janesville or taking a chance on a private seller, you must get your hands on the vehicle history report

A vehicle history report tracks a car from the day it leaves the manufacturer. It records vital information, such as:

  • Previous owners
  • Previous registration locations
  • Major accidents/damages
  • Maintenance history
  • Recalls
  • Major repairs
  • Commercial use history (fleet vehicles, rentals, leases)
  • And more.

When buying used cars in Janesville, the vehicle history report will give you a pretty good view of the car’s past. 

Driver Reviews

Before settling on a car, take some time to do a little research. Find a few models you like at the local car dealer in Janesville and find driver reviews online. Make sure you note the exact year and model of the vehicle you’re interested in. 

Do other drivers enjoy driving the vehicle? Does it handle intuitively and drive smoothly? Are there any recurring issues reported by the drivers?

Most importantly, use driver reviews to determine if the vehicle will be safe and reliable for you and your family. 

Form and Function 

Once you find “quality used cars near me,” you need to think about the right type of vehicle for your lifestyle. After all, if you will primarily use the car for getting back and forth to work in the city, buying a jacked-up pickup truck probably isn’t a good idea. 

However, if you enjoy outdoor recreational activities, you’ll need a rugged vehicle to suit your hobbies. For example, if you like boating and camping in a trailer, you’ll need a vehicle that can tow that equipment. 

Finally, think about your family. If you have young children, you’ll need a vehicle that has plenty of space and comfort for driving your kids around.

This is especially important if you plan to take family road trips. Having kids on a long drive is hard enough, but it’s even more of a challenge if there isn’t enough room for everyone.

The Test Drive

When looking at cars for sale in Janesville, it’s easy to fall in love with a vehicle based on its looks, features, and performance statistics. However, it’s imperative to test drive a vehicle before you drive it. 

First, you need to make sure all of the components of the vehicle function properly. This includes all of the electronics, heating, cooling, gauges, and driver assistance features. 

Just as importantly, ensure that you actually enjoy driving the car. We all make assumptions about how a vehicle will operate. It’s possible you will be let down by the real experience. 

Verify the Vehicle’s Condition

Finally, when shopping for quality cars for sale, it might be a good idea to have the vehicle checked out by your mechanic. This is vital when buying from a private seller. They will be more likely to hide an issue from potential buyers. 

Ask the seller if you can test drive the car and have an hour or so with it to get it inspected. If they say no, it might mean that they’re trying to hide something. 

Most dealerships have in-house mechanics. There’s no reason you can’t request an inspection before you sign the contract. 

Looking for a Car Dealer In Janesville? 

As you can see, there are a lot of factors to consider when shopping for used cars in Janesville. We hope our car buying guide helps you find the best possible used vehicle for you and your family.

And if you’re ready to start test driving, we would love to help. We provide easy loans for cars, regardless of your auto credit in Janesville. Take a look at our used inventory or give us a call at 608-531-1600.

How to Find Used Cars For Sale Janesville WI: 9 Tips for Prospective Vehicle Owners

cars for sale janesville wi

Car depreciation is no joke. A car will lose 11% of its value the moment you first drive it off the lot. By its first year, it will have lost 25%, and come its third year, its value will have decreased by 43%.

That’s why many people are looking into secondhand cars instead. They’re considerably cheaper, but they’re not always a great deal. You first have to learn how you can find quality used cars for sale Janesville, WI has to offer.

Keep on reading and we’ll teach you how to be smart about it.

1. Know Your Needs

You first have to know what you need in a car, regardless if it’s secondhand or not. What’s your purpose for buying one?

Do you need it for carrying heavy cargo over long distances? Do you need one that can park in tight spaces? How many passengers do you intend to carry?

Knowing your requirements will help you find a car that best suits your needs. But, of course, you also need to consider your preferences. 

Nothing is stopping you from buying a big car even if you’re the only passenger. You can also be choosy with the color as well as other features, like an all-wheel drive, leather seats, automatic emergency braking, and more. 

2. Set Your Budget

Knowing your needs and preferences will also help you set a realistic budget. It must align with the car you want. 

You should also decide whether it’s adjustable. Would you be willing to go higher if it means you’ll get the exact model you need?

If you have a set budget, you might have to adjust your requirements instead. Make a list of non-negotiable features, and see if you can work your budget around that. 

3. Consider Your Financing Options

Even when buying used cars, you have a lot of car credit options. Secondhand cars are already cheaper, but you still have to consider the impact on your finances. 

The general rule is that your monthly car payments shouldn’t exceed 15% of your net income if your only debt is a mortgage. This doesn’t include payment for insurance, fuel, and maintenance. 

Car dealerships have in-house financing options you can consider. But, you can also check out banks or credit unions. 

If you’re looking for easy loans for cars, you should look for local options. Check out auto credit in Janesville for starters. You can apply online, as well.

4. Go to Local Dealerships

Once you have a list of your needs and a budget in mind, you’re ready to look around for a car. Most people go to local dealerships first as it’s easier to shop when you have a lot of choices. 

Look for a reputable car dealer in Janesville. Don’t hesitate to ask around; ask your friends, family, neighbors, coworkers, and such if they have a recommended dealer that they trust. 

Remember not to buy on your first trip, though. Salesmen might give you tempting offers, but you’d be giving yourself future headaches if you dive in without researching first. 

5. Check Craigslist

Craigslist is also a great place for finding quality cars for sale. However, you’ll have to wade through all the listings to find the perfect one for you. 

This can be harder for some people, but you can easily browse the website during your spare time. As you’ll be dealing with individuals, though, you have to keep your guard up. 

The adage, “if it’s too good to be true, it probably is” rings true here. Don’t transmit money, no matter what reasons they give you. You won’t miss a good deal if you don’t wire the money in 15 mins – but you’ll likely avoid getting scammed.

6. Browse Through Facebook

Facebook is also a gold mine for used things. People tend to overshare here, anyway. 

The Marketplace seems like a good place to start for finding used cars. Search for “cars for sale Janesville WI” to see what’s available near you.

You should also join Facebook Groups; some have a specific purpose for selling used cars. They’re also a great place to get help as they function as a community. 

7. Browse Used Car Websites

Can’t find the time to go to a local dealer? Visit used car websites instead. 

The upside of this option is the same as going to a dealership – you can browse a wide selection of cars in one go. You don’t have to worry about getting scammed as long as you go to a reputable website. 

However, make sure to still follow our remaining tips below. 

8. Set Up a Test Drive

The car must be compatible with the way you drive. Whether new or used, you should test-drive all cars you’re planning to buy. 

This also gives you a chance to see if there’s anything wrong with the car. Listen for unusual sounds while you’re driving, and check the integrity of the controls. 

Drive over bumps, test the brakes, take tight corners, and so on. You want to ensure it won’t break down on you under the slightest stress. 

If possible, try to schedule different appointments in a day. It will give you an excuse to go after the test drive, during which you can expect a hard sell. You can also compare several cars this way. 

9. Inspect the Car

Do you know how to inspect a car? If not, you should bring a friend who does with you. 

On the exterior, you want to check for scratches, rust, panel alignments, and such. The glass shouldn’t have cracks and the lights should be working still. The condition of the tires will tell you a lot; the car should still have the original ones if they have low mileage. 

Under the hood, you should check the battery, radiator, and belts among others. Under the vehicle, feel the tailpipe and other components. 

You shouldn’t trust whatever the seller tells you about the condition. The car itself will tell you if you know how to inspect it. 

Compare Different Cars for Sale Janesville, WI

Never rush your decision when buying a used car. It can be a matter of life and death, especially as you don’t have the assurance of manufacturers. 

Don’t miss the chance to test drive and inspect the cars for sale Janesville, WI has to offer. Then, compare to find which one’s the best fit for you. Contact us today and let us help you out.

Car Credit 101: What Is a FICO Auto Score?

car credit

Maybe you’re 18 and ready to own your own car or want to trade in your old car for something new and exciting. Unless you’re independently wealthy, you’ll need car credit. Modern cars, whether new or used, cost thousands of dollars and dealerships work with you to find lenders.

If you’re new to auto credit in Janesville, then you might not understand the process and what you need to get the best loan. One of the most important aspects of getting a loan is your FICO Score. The score helps determine if you can get a loan and at what interest rate you get.

We’ll examine the importance of your FICO score and what it means for getting a loan. 

What Is a FICO Score?

The FICO Score was introduced in 1989 and stands for Fair Isaac Corporation. Fair Isaac was a data analytics company in California that specialized in credit. Founded in 1956, the company developed credit scores, but the familiar FICO score wouldn’t be developed until later.

When a person gets a loan, the bank takes a risk that the loaner might default on the loan. The bank must then go through a difficult and costly process to get the money and even then, may not get it back. They needed a way to determine based on the previous credit history if they are likely to default or not.

A credit report shows your credit history and if you paid your loans on time or not. The report is complex and while still an important tool, doesn’t provide a quick snapshot of your risk. The FICO score takes the credit report and other factors and boils everything down to a number between 300 and 850.

The higher your number, the less likely you are to default. The lower the number, the more risk. Today, the FICO score is the industry standard for most loans including those for a car dealer in Janesville.

What’s in Your FICO Credit Score?

The score takes in more than just your credit history. In fact, there are five primary aspects of the score beginning with your payment history.

Banks like customers that are easy. They pay their loans on time and don’t require phone calls or mail to remind them about it. Your payment history makes up 35 percent of the total score. The company looks at your other loans and debt to see if you pay on time or if you’re late.

Late payments can decrease your credit score. Defaulting on a loan, which is not paying on a loan until the bank gives and sends you to collection, can cause a severe credit score decline. Civil suits and bankruptcies also severely decrease your credit score.

Your outstanding debt makes up 30 percent of the total score. The less debt you the better off you are. The more debt you have the less likely you’ll be able to keep up with all the payments. Adding another loan could put you over the edge.

The length of your credit history makes up 14 percent of the score. The longer you’ve had good credit, the less risk you are. People with a short history are an unknown.

Someone with 20 years of car payments and house payments is less risk because they have a well-documented history.

Your account age counts for about 10 percent of the score. If you’ve had a house payment for 20 years, then it means you’ve been paying for 20 years. It’s the same with credit cards. If you’ve had the same credit card for a decade, then it shows can handle the debt.

The last part of the score is the types of credit used and makes up 10 percent of the score. A variety of debt through the years looks good.

Car Credit and Your Score

Lenders for automobiles are like other lenders and use the FICO score to determine risk. When you look for a quality used car, the lender uses it in its determination for a loan.

The average credit score is around 700. With an excellent credit score such as 750 or above, you have little worries about not only getting a loan but also a great interest rate.

If your score is 600 to 750, then you’ve got good credit. You have a good chance of getting a loan with a good interest rate for your car.

Scores of 600 or below, are considered a high risk credit score. You’ve had problems with credit in the past and you represent a high risk to the bank. This doesn’t mean you won’t qualify for a loan, but you have a higher interest rate.

If you want a car loan with a low credit score, decrease your risk by having a larger down payment. The higher amount you borrow, the higher the risk for the bank.

Improving Your Credit Score

You can get your credit score from the three primary credit bureaus: Experian, Equifax, and TransUnion. They provide both the score and your credit report. Look over your credit report because there are often errors.

If your score is low, then try to eliminate debt and pay your loans on time. Your credit score gradually increases if you have good credit practices. Car dealers have many different lenders to choose from including lenders that specialize in great credit to those that specialize in bad credit.

Don’t assume you won’t get a loan because you have a low credit score. Instead, talk to a car dealer and see what they can do for you.

Get Your Used Car Today

Don’t drive around in a car you don’t like. If you want something better, then you’ll need car credit. We’ve examined how your FICO score impacts your car loan and how you can improve your credit if needed. You can even apply online.

If you’re looking for an auto dealer in Janesville, then contact our experts today. We’ll find the best loans for you and help you find the car of your dreams.