How to get Approved for a Car Loan with Bad Credit in Pennsylvania
My friend visited me from Pennsylvania last weekend. She was tired of lack of opportunities for getting a bad credit car loan in a large city like Pittsburg. She asked me for help and wanted to know ways of getting a new car despite bad credit history.
Her situation is quite similar to other people in Pennsylvania. Many bad credit borrowers have a hard time finding an auto loan for buying a new car. They don't get a loan approval easily. And, those who don't love the rates that they are offered. My advice is the same to her and other Pennsylvanians - Choose a used car.
Bad credit car buyers should opt for a used car because they are comparatively cheaper. It means a lower loan amount and affordable monthly payments. Also, many used cars are in a better condition than what they used to be. It makes them a win-win deal.
Ellen has a terrible credit history. It is because she lost her job in the last recession and was unable to pay bills. There are other people with similar stories. Lenders in Pennsylvania understand that people have suffered because of severe economic condition of the nation. They have no problems in approving a bad credit borrower. All they want is security of their money. And, you need to assure lower risk to the lender. Follow five steps to get approved easily:
Step 1: Prepare your Document File
When the lender sees your file complete with your income proof, employment details and list of receipts of utility bills, he will be assured of your financial condition. If the lender becomes sure of your current financial stability, he may offer you a car loan instantly.
Step 2: Find a Cosigner
Remember that a cosigner can turn the tables in your favor. Convince someone with a good credit score to become your cosigner. Your cosigner shouldn't be debt-ridden. A person with high debt-to-income ratio will find it difficult to make payments, if you fail to do so. It will increase the risk factor and so, lenders will be against it.
Step 3: Make as Much Down Payment as Possible
When you want easy car loan approval despite bad credit history, down payment can help you. Minimum of 10% of the total amount is ideal for down payment. Although, more is always better. If you don't have cash for putting money down, then you can trade-in your old car or even put your property as collateral. It is advisable not to apply for no down payment option because you will have to pay slightly higher rates.
Step 4: Find the Right Lender
My friend did a mistake of applying with several traditional lenders. As most lenders don't approve an individual with bad credit, she had to face constant rejection. Don't commit the same mistake. Apply with only those lenders that have no problem in approving your bad credit car loan in Pennsylvania. Also, the lenders/auto financing companies should be offering loan for buying a used car.
Step 5: Compare Car Loan Quotes
When you apply for a bad credit car loan in any Pennsylvanian city, remember to analyze the loan quote. Don't just rely on the loan rates offered to you. Check the monthly payment amount, loan term and conditions, total loan amount, total interest amount, penalties and fees, etc. Choose a deal only when you are very sure of making regular payments. This way your credit score won't be harmed any further.
Once your credit score improves and you are in a condition to buy a new car, you can opt for one. Till then, it is essential that you work with a used car. Remember a car is a car. And, as long as it is taking you places in Pennsylvania, it is fine. Hope that even you find the car of your choice with affordable loan rates!
:- Posted by Admin on 14th July, 2022