Getting an auto loan isn’t nearly as difficult as it was in the past – even if you have really bad credit. The only thing you have to prepare for is the higher interest rate that comes with it. In fact, bad credit car loans are big business, which means that there’s a lot of competition and you may get one for an acceptable price. Consider the list of steps to take in order to ensure that you’re in the running for the best interest rate terms.

Check Several Copies of Your Credit Report

By knowing how low your credit score is, you can be prepared for the type of interest rates that car loan lenders will show you. You may be thinking, “Why do I need several credit reports to know my score?” The answer to this is that nearly a quarter of all credit reports have discrepancies. This stems from the fact, in part, that no agency is required to report the details of their interaction with you to a credit reporting agency, so the agencies must use complex methods to secure them legally – including the use of computer algorithms to estimate.

By obtaining your credit reports from multiple agencies, you have the opportunity to notice things that don’t match. By following procedures and getting them corrected, you could raise your credit score and secure better interest rate offers from loan companies of all kinds. Furthermore, if your score is indeed lower than you’d like it to be, the details of your credit history are the first step to changing some of the factors that contribute to the delinquencies.

What Is the Price of the Car You Want, and Can You Afford It?

This is a very important question; although it comes off as obvious. The truth of the matter is that the number of Americans who default on their monthly interest has been rising for a decade. It is crucial that you nail down how much you can afford each month, and factor into this calculation the gas, repairs and even some common, unexpected occurrences into the total amount.

For instance, an auto loan of $22,000, at the kind of interest you can expect with bad credit – 14% – would require a monthly commitment of more than $350 over a period of five years. Before making such a decision, can you be certain of creating a budget that doesn’t falter? Not enough people ask themselves these questions; don’t be one of them.

It’s better to be sure you have this amount of money in the bank for several months in case you can’t work for whatever reason and financial hardship becomes a problem. For six months, you would need $2100 to be certain that you could pay your auto loan for the next half-year. This doesn’t include insurance and gas, of course.

By putting enough money down initially, you reduce the gradual costs. This is why car loan counseling experts tout the importance of the down payment. Your inability to put down at least 20% is highly suggestive of the your inability to consistently maintain the payments; furthermore, the car starts losing value precipitously the second you start driving it.

Auto Lenders are Everywhere

This means not to put all your eggs in one basket. You can find an auto loan lender online, at the bank, at your current credit card company, and elsewhere. For reasons that vary, many people seek out dealer financing, even though it is often slightly more expensive. But sometimes they are willing to work with you more. If your credit score is low enough and you have bankruptcies on your record, then this may be one of your only options – but you do get the car you need.