Truth Is If You Have Bad Credit You Either Won't Get A Car Loan Or Interest Will Be High But All Is Not Lost Yet

First of all, if you have a poor credit rating, you cannot expect to find the kind of deals on loans that those with good credit rating have. Unfortunately you will have to pay higher monthly instalments and interest when paying back the loan. However, you will still be able to get a loan if you shop around. Ideally check out several brokers and insurance companies before you sign on the dotted line. You can get quotes online or over the phone, but try to ensure that you are dealing with a reputable company. If you have shopped around, and companies are offering you much the same deal, then don't be tempted by an offer that seems too good to be true. It probably is just that - too good to be true.

You should first of all approach a debt management service to see if they can help you. You can find these online, get information on them in your locality from your local library, or try the Citizens Advice Bureau, or a charity which specialises in helping people out of debt. This advice is for a long term strategy for helping you out of your financial difficulties, as having a debt management plan, and paying your monthly instalments on time, perhaps through a third party, will eventually help you raise your credit rating over time.

However, if you need a car now, or in the near future, this is not going to help. You will find that some companies specialise in giving car loans to people with a bad credit rating, but they will have certain conditions which you may find restrictive and will not want to entertain. First of all it's easier to get a loan on a used car, only because they are cheaper and the company doesn't have to loan you as much money as it would if you were to buy a new car. You may have to provide half or a little less than half of the total cost of the car. Certainly you must be over 18 and some companies say to qualify for a bad credit car loan, clients must be over 23. You have to be employed and take home at least 850 pounds a month, and to be able to prove where you have lived in the last three years, for some companies to consider giving you a loan.

Things are easier if you have a friend or relative who is willing to co-sign your loan agreement, and also if the circumstances of your getting a bad credit rating are not entirely your fault. Some companies will find a used car for you and have it delivered to your door, and you may or may not want to avail yourself of this optional (in most cases) service.

Whatever you decide to do, it's advisable not to take out a second mortgage on your home to finance a car loan if you have bad credit. Always read the small print on any agreement before signing it and be sure you shop around to get the best possible loan terms.