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Home » Bad Credit Car Loans – Cincinnati, OH

Bad Credit Car Loans – Cincinnati, OH

When searching for car financing, it’s important to understand that a bad credit score isn’t the end of the road. There are plenty of bad credit car loans in Cincinnati, OH, and plenty of dealerships ready to help, like McCluskey Automotive. Dealerships like McCluskey Automotive are trained to help bad credit customers, and get them into a car. The ultimate goal however, is to help get the buyer’s credit score back on track by reporting their payment progress on a car loan to the credit bureaus. That way, a bad credit customer will eventually be able to get financing for a better used car — or potentially a new one.

In this situation, there are a few things that need to be done. First, it’s important to check your credit score and attempt to clean up any “black marks” that might appear. Now that you’ve looked at your score, it’s important to map out a car budget and save up for a large down payment. This will allow reality to set in, and ensure that you are buying something that is within your price range. Finally, it’s time to find a lender and apply for bad credit financing. Make sure to make the monthly payments on time, and always communicate with your lender about any issues that might arise.

The words Auto Loan are spelled out in Scrabble letters on a table.

Check Your Credit Score and Clean Up Credit Report

Before applying for a bad credit car loan, it’s important to check your credit score and report. There are numerous websites that can show you your credit score, and everyone gets one free credit report a year.

After checking your credit score, it’s time to find out where you fall on the scale. This is a good way to figure out a ballpark estimate of what your interest rate on a car loan is going to be. As far as bad credit goes, there are three categories a score can fall under: nonprime, subprime, and deep subprime. Nonprime is a borrower with a score between 601 and 660, and is the border between good and bad credit. If anything, it’s a good basis to judge your score by. Subprime borrowers have scores between 501 and 600, and deep subprime is a score below 500.

Edmunds cited a 2014 Experian report that broke down the interest rate as follows. A subprime buyer got an average interest rate of 15.72 percent, and a deep subprime buyer got an average interest rate of 19 percent. Compared to the average nonprime buyer’s used car interest rate of 9.29 percent in 2014, it’s clear to see that the interest on a bad credit car loan is much higher than the interest on a typical used car loan. The numbers might have changed slightly since then, but the concept hasn’t: you will still be paying more than someone with an average credit score. Plan accordingly.

We’ll get there in a second, but now it’s important to talk about those black marks on your credit report. Along with a score, you should also have looked at your credit report. Contact your credit card company (or the source of the black mark) and see if you can fix it. A black mark could be anything from late credit card payments to foreclosure. Some of the minor infractions can be removed so that your score improves, and the major ones you will need to let time — combined with positive financial habits — heal your score. Eventually, even the major black marks will impact your score less; you just need to be aware of your credit score, and work around it.

Set a Budget

A closeup shows a pen, a calculator and a budget.
Now that you’ve checked out your credit score and cleaned up your credit report, it’s important to set a budget. This is where being realistic about what you can afford comes in. It’s important to find an auto loan financial calculator, and plug in the required fields. That way, you can actually see how much the interest rate is going to impact you.

For example, take an interest rate of 19 percent and apply it to a 60 month car loan amount of $16,333. This equates to a monthly payment of $423 per month. If all you can afford is $275 a month, then it’s time for a dose of realism. You won’t be able to afford a $16,000 vehicle. You are going to need to lower your target price range, and then shop according to how much you can afford to pay a month. If not, you run the risk of getting mixed up with a loan you can’t pay-off.

It’s also important to save up for a large downpayment, and factor that into your budget. Most dealerships will require a larger-than-average downpayment; sometimes one greater than 10 percent. Therefore, this should be the first thing you save up for.

Seal the Deal

A closeup is shown of hands shaking after getting a bad credit car loan in Cincinnati, OH.
Now that you’ve learned your credit score, attempted to strengthen it, found out your interest rate, set a budget, and saved up for a downpayment, it’s time to get pre-approved. Typically, it’s easiest to just go through a dealership for bad credit auto loan financing, but we will explore some different options shortly.

Seek Approval

Dealerships that help bad credit consumers will do everything in-house. They will take you on, find a loan for you, set your interest rate, and select a few cars for you. It’s easily the most hassle-free option, and typically dealerships have connections that can get you loans that match, or are better, than the other lenders out there.

In order to find a dealership, simply go online and look for any dealerships in your area that provide bad credit auto financing. Poke around their website and see what information they have. Typically, you can fill out a form online to get pre-approved.

After you find a dealership, they will do the rest. Explain to them you already figured out what you can and can’t afford, and show them your credit score. This will speed up the process, and make both of your lives easier.

Some Different Options

Some other options for bad credit auto loans might be a bank or credit union. Credit unions are more lenient with their members when it comes to providing loans. So, if you aren’t a member make sure to sign up and talk to them about what they can do for bad credit financing. Or, go check out a bank and see what they can give you for a loan. Finally, you could avoid the loans altogether and save up to buy a cheap “beater” car that’s for sale by a private owner. Sometimes you can find a good deal, and they make for a good temporary fix in a pinch.

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