Your vehicle is a crucial part of your life. And living in Indiana, it’s almost a necessity — especially when those colder, winter months hit. Consequently, if your car seems to be kicking the bucket, or is inoperable altogether, it’s an issue that can really throw things off your day-to-day operations. And if your bank account is a little impoverished or you have bad credit, then turning to a used car loan in Evansville might be the ideal solution.
In this article, we will be exploring whether you can get a car with a bad credit loan in Indiana.
Poor Credit Score
Simply put: your credit score is a 3-digit number between the range of 300 and 900. This digit notifies prospective lenders of the potential risk level associated with lending you money. Indiana has a few credit agencies – among them are Experian, TransUnion and Equifax – that determine your credit score.
And they ponder many factors when deciding the number in which to assign you. A higher number communicates you’ve been responsible, while on the other hand, a lower number indicates the opposite.
A credit score of 650 (or higher) qualifies you for a more standard type of loan, while any number below will limit you to the stipulations of a bad credit car loan.
Improving Your Credit Score
Yes, there are alternatives for financing a used vehicle, even with poor credit. However, that doesn’t mean you should do it without looking to improve your credit in the interim. Here are some ideas to help you start that process:
- Make punctual payments: It doesn’t matter where the outstanding balance is; phone, electric bill, internet, etc, pay it on time — every time. It’s more than money, it’s personal responsibility; do the right things and pay when payment is due, you’ll be glad you did
- Make Minimum payments: There are times in life where, financially speaking, you’re going through a difficult time. Happens to be the best of us. But, that’s no excuse to blow off your economic obligations. Make minimum payments if you have to. And do it for as long as you need until you get back on your feet
- Reduce credit usage rate low: Do not do any spending that is above 35% of the credit limit that you have at your disposal
Is it Possible to Qualify for a Car Loan With Bad Credit?
Yes! Of course, it is! And for good reason, sometimes life can knock you down, bad credit can weave its way into the lives of honest people. And when this happens, Edge Auto Sports has got you covered! The drawback is you won’t qualify for lower interest rates or ideal terms as it pertains to your loan. But receiving cash loans is still plausible in Evansville, even if you have bad credit.
It’s still possible to finance your car for a time with bad credit car loans, in that respect, it’s indistinguishable from a normal loan. But, that’s where the likeness stops. Below are two variations of a normal car loan and that of a bad credit car loan:
- The moneylender: You may not have the right qualifications for a loan from a credit union or bank, which means, you’ll need to go with a non-conventional lender
- The prime interest rate: Poor credit means you’ll have to pay a higher interest rate, this is due to the fact that you’re more of a liability to the lender. Good credit entails the opposite
The Process: Applying for a Poor Credit Car Loan in Indiana
Getting approved for a bad credit car loan in Indiana requires a little more than the quality of your credit score. The lender looks into all the factors at their disposal and then makes a choice on whether you qualify or not. Here are some variables they will look into:
- Down payment size: When you have a big enough down payment, it demonstrates to the lender you are both ready for the loan, and somewhat financially competent. A bigger down payment means a better deal. Having a substantial down payment will result in smaller payments each month as well as lower interest rates
- Income statements: A lender may ask you to show certain data as it relates to your income. It’s a good idea to have a couple of months of your accumulated income statements ready
- History of employment: Lenders want to know that you’re reliable and trustworthy. For this reason, they might ask for employment records: Pay stubs, check deposits etc, are all valid documentation
- Affordable car: Cheaper loans are much better for bad credit car loans. If you’re going to pay a higher interest rate based on your poor credit score, and then you add a costly car payment to your already engorged interest rate — you’re pretty much begging for monetary problems. The smart action to take is go for the smallest payment
In Indiana, you most certainly can find ways to work with bad credit. Yes, some benefits will be held back, but you can still get a car loan to match your budget as well as your needs.