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Having poor credit can make you feel like a lot of doors have been closed in your face. One of those doors might be the dream of having your own car. Unless you live in a big city where the excellent and expansive public transportation system makes owning a car unnecessary, having your own set of wheels to get around is practically a requirement these days. If you don’t have the cash to buy a car outright, you will need an auto loan. If you have poor credit, however, this can be downright HARD to obtain. Believe it or not, however, it is not impossible to obtain an auto loan with bad credit. It might be expensive, but nowadays it’s not even that hard. Getting a bad credit auto loan through a dealer or over the World Wide Web can be done, with much of the same process shared between the two.

The advent of the Internet has made it much easier for people with bad credit to access lenders of all types (auto, mortgage, banking, etc.) that are willing to do business with them. The costs for this type of credit used to be borderline-prohibitive, but that isn’t even necessarily the case anymore. The interest rate for a bad-credit auto loan is still high with comparison to its prime rate cousins. But that doesn’t mean that your loan will carry a rate that you cannot afford at all. If you have any real property that you are able to provide as collateral on your loan, you might even be surprised at how affordable credit can be in your situation!

There’s a lot of competition in the field of financing auto loans for those customers with sub-stellar credit. Every individual lender will maintain its own set of criteria with regards to eligibility. These lenders tend to all offer quick decisions, and the number of competing financial outlets has made rates more competitive than ever before. You should look for the company that is currently offering you the best interest rate for your particular financial situation. But make sure you pay attention to the fine print. Some companies will charge you an application fee, which could drive up the cost of credit over a company with no application fee and perhaps a slightly higher rate. The monthly payment has to be something you can afford. A big part in determining what this amount will be is the term of the loan. A longer loan will generally give you a lower monthly payment, because the principle amount of your loan is being spread out over a longer repayment period. Regardless of what company you choose, the first rule is the same: read, read, read! You don’t want to get caught in a terrible bind because of a contract containing tricky terms that you didn’t notice before you signed it. For example, no bad-credit auto lender ever offers zero-percent interest without some MAJOR “ifs.” Inevitably, these conditions will end up costing you more than if you would have just paid the interest charges in the first place. Make sure you look for those clauses, and decide whether they are worth it for you.

Another part of how affordable your auto loan will ultimately be is one that is much more under your control than the interest rate. And this, of course, is what car you choose to buy. Not getting in over your head with a high auto loan bill is critical. After all, you are driving your car – your car should not be driving you! If you are struggling to pay your bills every month, then you DEFINTELY don’t want to be looking at very expensive cars that will increase your likelihood of not being able to pay off your loan. You should try to get the most car for your money, but keep your maximum purchase amount realistic. Don’t fall prey to the trap of falling in love with an expensive vehicle and believing that you will somehow make sacrifices to fit it into your budget! There are multiple calculators available online that can take your income and other monthly bills and give you a reasonable number for what you should be spending on a car. You also have to consider the costs of insuring your car, and the costs of maintenance – especially if you are going in the other direction and trying to save money by buying a clunker. To be very frank, how much would it suck to be paying a monthly bill for a car that has crapped out on you, and that you cannot afford to repair? ANY monthly payment is too high for a non-drivable vehicle!

The second rule of taking a poor-credit car loan is the same as the advice I’d give to anyone financing a car: pay your bill! If you are diligent about paying your monthly bill on time, your car payment could actually become something that HELPS your bad credit. Any bill that you are able to maintain is one that can boost your credit score, because it shows that you are able to take responsibility for an obligation. If you default on your auto loan, however, the results can be devastating. Your credit will get worse. And a bad credit auto lender is much less likely to give you a grace period before repossessing your vehicle, should you go delinquent on your loan. In this case, your lender could sue you for the amount you still owe, AND you’ll have no car! You don’t want that to happen. Make sure that when you get your loan, you take good care of it.

As someone with a poor credit score, you will necessarily be viewed as a higher repayment risk for your auto lender. This is a result of the same logic that makes people with good credit scores a low risk in the eyes of lenders. This risk level is determined by the information in your credit report. By knowing your own credit score and the information in your credit report, you stand a better chance of going into an auto loan knowing where you stand and what kinds of loans you are likely to be eligible for. Even those with poor credit need to make sure that the information in their credit report is complete and accurate! You’ll increase your chances of getting the best auto loan for you, whether prime or bad credit, if you stay on top of your game.