Bad Credit Car Loans Culpeper VA

There are a few steps you should take before applying for an auto loan — especially if you are uncertain about your credit score. In most cases, a score of 600 or less is seen as low. When you go to get an auto loan, low credit can result in fewer options and higher interest rates. Before applying for a loan, you should check your credit score with at least one credit bureau. Once you have this information, be sure to review what is causing your low credit score. In most cases, it's likely due to excessive debt, repossessions, bankruptcy, and multiple missed payments. As you prepare to apply for financing, you should work to pay down your debts as much as you can without putting yourself under additional financial stress. You should also spend time assessing your current financial situation and set a reasonable budget for a car payment, insurance, gas, and maintenance. If you check your credit score, set a budget, and determine that purchasing a car isn't immediately possible, it's best to hold off and work on paying off your debts for a few additional months before applying for a loan.

The best way to get approved for an auto loan is to prove your financial stability. While credit score weighs heavily on your approval odds for an auto loan, proof of financial stability is also taken into account when a lender is assessing the creditworthiness of an applicant. Proving that you have a steady income stream shows that you have the means to meet a monthly payment with minimal risk of defaulting on the loan. Past credit behavior is also taken into account. For example, if you have managed an auto loan in the past without missing a payment, you'll likely see an increase in your approval odds, even if your credit score is currently low. Conversely, if you have a repossession or frequently missed payments in your credit report, your approval odds will likely decrease. When you apply for financing, you'll be asked to show employment records as proof of income. However, select lenders will also take other sources of income into account, including child support or disability income. Be sure to speak with one of our financing professionals if you receive these types of payments, as it will help us get you approved. Lenders will also inspect your credit utilization, payment-to-income ratio, debt-to-income ratio, and payment history to determine the credit risk. Put simply, if you can prove that you can make monthly payments, you may see lower interest rates, greater approval odds, and more desirable loan terms — even with bad credit.

In addition to providing steady income, there are numerous other avenues to help increase your approval odds when applying for an auto loan with bad credit. The most common is to apply with a co-signer. A co-signer is someone with more established credit and a higher credit score who agrees to step in and make the payments if you are no longer able to. This minimizes the risk for the lender as the loan will get repaid one way or another. A co-borrower is a similar concept. The only difference is that while a co-signer has no rights to the vehicle, a co-borrower has equal rights to the vehicle and the loan. Another common theme when drivers are car shopping on a budget is to buy a used car, as used cars have depreciated, making them more affordable for second-hand owners. However, if you decide you simply cannot live without a brand-new vehicle, leasing is a more affordable alternative to financing a new car. If you can prove your steady income, applying for a lease may be an option, even with a low credit score, as the monthly payments are more affordable than most new car loans. Finally, some lenders offer credit builder loans. Also referred to as a fresh start loan, these only require that the applicant has a steady income and do not require an established credit history. This is a great option for drivers buying their first car or ones struggling with their credit. 

Even with bad credit, you still have options when you're shopping for a vehicle. If you're looking to explore these options further, use the contact form below this page to reach the sales team here at Chrysler of Culpeper to learn more. If you feel ready to apply for financing, you can do so by using our secure financing application while you're here on our website. We look forward to helping you get behind the wheel of your next car!