Bad credit is a lot like a curse. You make one mistake, and it follows you for the rest of your life. Some can’t recover from it, while others are lucky enough to find the light at the end of the tunnel.

The Curse of Bad Credit

A person is cursed with bad credit as soon as he fails to hold up his end of the bargain with a bank. Take for example your credit card bills. You continue to max out your cards and fail to pay the bank the money that you owe them. This is guaranteed to put the curse of bad credit on you.

Can you reverse bad credit?

Unlike a regular curse where you just apologize to the spirits or cast a spell to make everything okay, bad credit is going to take a lot of work. And because it takes a lot of work, it will also take time before banks can start trusting you again. Not a lot of people have that kind of time, especially for those who need the money for other finances like paying for their mortgage or buying a new car so they can get to work.

Secure a car loan

Luckily, there is still a way to guarantee a car loan even if you have bad credit. Bad credit car loans can kill two birds with one stone: it lets you buy a sensible car for everyday driving as well as an opportunity to reverse their bad credit score. But they have to promise to pay their debt. Which is why it’s still very risky for them to take on this loan.

Things to consider before applying

Am I financially ready? Just because you have bad credit, it doesn’t necessarily mean that you are out of money. Before even applying for the loan. Stop and think if you can actually handle the financial responsibility that comes with it. Can you make the payments on time? Can you afford to pay for gas and possible repairs in the future? Remember that with cars, the bank is only half the responsibility.

Avoid add-ons. Banks will usually offer you a variety of add-ons that can help you with your car’s care on the long run. Try to avoid these for now, especially if you are not sure if these add ons like gap cover and loan protection insurance are actually useful.

Keep the payment term short. If you think you can pay the car in full in six months rather than a year, do it. The shorter the payment term, the smaller your interest.

Choose a car that is functional, not flashy. Sure, a flashy car will turn heads when you drive down the road, but standing out won’t pay the bills. Choose a car that is functional and will suit your needs. Dealers will also give you the freedom to choose it in the colour of your choice. It may not be flashy, but at least it’s economical and can get the job done.

Choosing a lender

Once you’ve fully thought about the responsibility of a car and are absolutely sure you can handle it, then it is now time to choose a lender. It’s a good idea to do your research and know how these banks, brokers and lenders function. Do they charge low interest? What are their charges? Find out everything you can about them. It’s best to go with a trusted company like Alpha Car Finance to make sure that they can be trusted with your financial needs.

How to get a secured Car Loan

Once you’ve chosen a lender, don’t be afraid to ask them the important questions and to know everything you need to know before signing anything.

Eligibility requirements. Sometimes, it’s not enough to just have bad credit. Find out if you are qualified for the company’s financial eligibility before anything else. If you qualify, great! If not, try to find another lender that will do business with you.
Budget. Check your bank account and try to determine how much you can commit to car payments each month. Remember that once you commit to this, you have to own up to it.
Apply. Once you’ve asked all the important questions, like deadlines, how much interest is involved, how long the payment will be, etc., and you are happy with their answers, then submit your application.
Wait for the approval. After you sign the contract, wait for the company to direct debit the money into your account. You have now given yourself a financial responsibility that can potentially lift or worsen your already bad credit score.

Make your payments

Once you’ve purchased the vehicle, don’t forget to make the monthly payments you promised. Consistently pay your bills on time and eventually, banks and other financial institutions will begin to trust you again, and you will be free from the curse of bad credit.