Finance Blog

How to apply for used car loan with bad credit score?

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Thinking of getting home, a car, but is your bad credit restraining you from financing the same through a second party? There are can numerous reasons for one to have a bad credit record such as past bankruptcy, or can be due to simply being a defaulted on loans or credit cards. Now, if you are thinking of buying a used car through a loan, but with bad credit, it might not be easy, but the same isn’t impossible at all. Fortunately, today there are numerous ways of increasing the chances of availing car loans with bad credit scores and that too at affordable rates.

Now if you are thinking of buying used Hyundai i20 and hold a bad credit score, you can still proceed with a loan by keeping in concern the strategies mentioned as follows.

  • Maximizing the down payment

Whatever be the used Hyundai i20 India rate, increasing the amount of the down payment you have to make will help you to a great extent in being able to gain the loan approval even with bad credit score.  This makes the lender secured on his part, and he is eager to offer the loan without any hesitation. Again, down payment helps in reducing the rate of loan interest that you have to pay. This in a way reduces your EMI rate.

  • Availing pre-approval

Pre-approved car financing in case of bad credit gives you the power of negotiating the charges that the dealer asks so as to get the car at the lower price. As you are qualified beforehand, it assists you in knowing the exact money you are capable of spending while buying a used car. This in a way helps you in remaining within your budget and hence renders focus on getting the best possible car deal by keeping stress about financing at bay.

  • Having a guarantor/ cosigner

You may be having a bad credit score but making an application for a used car loan with a guarantor or co-signer is one of the best ways out to avail car loans. This is because in case you turn out to be a defaulter for one more time, it is your guarantor or co-signer who takes the responsibility of clearing the loan. This means the lender now has another person to rely upon for clearance of the loan he will be granted.

  • Offering collaterals

Borrowers with bad credit score can apply for car loans in many ways and making a loan application by offering collaterals is one of the best ways out. You can keep assets like your home or fixed deposit certificates and so as collaterals with your lender. This will offer the lender, some security about the loan repayment.

Hence, if you are a borrower with bad credit score, you can now relax and get the loan approved easily by adhering to any of these steps.