Getting a Bad Credit Auto Loan without a Cosigner

You might have heard that for the past couple years only buyers with excellent credit are able to secure loans for new automobiles. While this may be true for some dealers, maybe even most dealers, this certainly isn’t the case for all dealers. So, if you have less than stellar credit do not despair, there is an automobile loan available for you, too.

If you are looking for an auto loan you need a credit score somewhere in the neighborhood of 680-700. Anything above 700 is considered an excellent credit rating, but the average credit score of the U.S. consumer is about 680, so don’t feel as if you need to hit the high water mark.

Even if your score is less than 680 there are still good auto loans available for you. Remember, the average is 680 but a number of consumers are getting by with a credit score much lower than that. A so-called “bad” auto loan just means you will pay a higher interest rate, be required to put more money down or have a longer pay-off term, it doesn’t mean you can only buy a lousy car.

Most lenders today rely on more than your credit score. They want to know your current income, employment and residency history before they issue you a loan or even make you an offer. Be prepared to bring your past several pay stubs. Lenders want to know you can pay for whatever vehicle you want to buy. This repayment ability can sometimes supersede bad credit. If you can prove your financial stability and ability to repay, lenders will look upon you much more favorably.

If all else fails and you are still unable to secure an auto loan you might need to turn to a close friend or family member with good credit willing to cosign on a loan. Their consigning a loan for you is a promise to the lender that they will step in to repay the loan if you are unable to. This puts the cosigner at risk for your debt, but as long as you keep up your payments and don’t let the loan fall into default, your cosigner will be safe. Additionally, you are reestablishing your credit. In time, the loan will be repaid and your cosigner is off the hook!

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