For many individuals who either have poor credit or a lack of credit history, there are many challenges when securing loans through traditional lending firms. While it may prove to be more difficult to obtain a loan, it is still possible.
For anyone who has tried to obtain a car loan from a variety of banks and financial institutions, as well as directly through dealerships – this effort can be met with rejection after rejection, if their credit score does not hold up during the credit check process. This is why contacting a company like Canada Drives can aid you as you search for an alternative loan provider.
It’s important to realize that even if you exhaust all of your resources when it comes to finding credit, you may still come up empty handed. So, what happens if you haven’t been able to secure credit for a new vehicle but you really need to get on a path to find funding soon? Well, in order to build up a positive credit history, you need to consider a number of elements to secure that loan next time you inquire. Here are a few tips to get you started…
Take a Step Back
The first thing to do if you find that you’re hitting a brick wall while looking for a car loan is to reflect on your credit rating and overall situation. Like most things in life, the first stage of improving a situation is to face the facts of your situation. Being in denial about your credit result isn’t going to help you in the long run. Make the effort to log all of your debts and where you went wrong in your payment schedule. By understanding what tarnished your credit history in the first place, you’ll be better positioned to avoid this pattern in this future.
If you have yet to establish a credit history, take the time to research how to build positive credit. If you know others who have a good credit score, talk to them and get some tips that you can use. Luckily, we live in an age where research is at our fingertips through the internet – take advantage of this and try to learn from others as much as you can.
Adjust your Expectations
Sometimes, in life we have expectations that are set in stone, surrounding certain issues, so much so that we forget for a moment to look at the situation realistically. This can be said for applying for a car loan as well. This is where adjusting your expectations about various car-related areas will come in handy.
One of the areas where adjusting your expectations will benefit you, is with regards to the interest rates. While you may still be able to obtain the necessary financing for your vehicle, as a result of your lower credit score, you are more likely to also walk away with a much higher interest rate, than you would if your credit was in better shape.
Knowing this piece of information going into the loan process is very important as it helps determine how you plan to pay for your vehicle upfront as well as over time. With a higher interest rate you may want to consider saving up more funds to put towards a down payment. If you can save for a larger amount, the total loan balance, and in turn even the amount you will pay each month may be much less. Additionally, when paying more upfront you can also set yourself up to pay the loan back in less time.
Secondly, you will also want to adjust your thinking about what type of vehicle you can afford. Perhaps, you have your mind set on a certain car; however with the higher interest attached and even with a smaller loan balance you may not realistically be able to afford it after all. This does not mean you have to buy a car that you don’t like. Rather, you can just aim for one a little less expensive. You also may have had your mind made up about buying a brand new model but another way to go could be to look at purchasing a used vehicle instead, which would also lower the costs.
Lastly, if you find you still cannot get the car loan you need, you can look into having a friend or family member act as a co-signer. This might make you feel initially that you have to rely too much on someone else, however if you can look beyond this issue and see this as a positive occurrence, this can be a beneficial option.
Even if you’ve been fortunate enough to obtain a car loan, it is also in your best interests to take action towards improving your credit situation. As you make your payments on time, your credit score should rise. With an improving credit picture, you may want to look at re-negotiating or re-financing your current car loan if possible. This means, you can look at securing a lower interest rate to help save some additional money each month and each year.
By contacting the team at Canada Drives , you can also seek advice on how to go about re-establishing your credit. With their assistance, you will be better equipped to navigate this process and secure that well-needed car loan.