You need a quality used car, but you have bad credit. It might feel like an impossible situation, but you know of others who are driving nice cars even though their credit isn’t great. So, how do buyers get car loans with bad credit in Texas? You might be surprised to learn you have a few options.
First, let’s take a look at what won’t work for you. Banks, credit unions, and traditional car dealerships have strict lending criteria. Unless your credit is excellent, or at least very good, you’re unlikely to be approved.
Unfortunately, the methods used for approval are rigid, so the reasons for past late payments or other issues don’t matter. They look at a number—your FICO score—and deny or approve based on that alone.
So traditional car loans won’t work, but you do have options.
LOAN WITH A CO-SIGNER
Banks won’t lend to people with bad credit, but one way around that is to have a co-signer with excellent credit. If your parents, other family members, or even a friend is willing to co-sign your car loan, you have a good chance of being approved. Many car buyers don’t like this method because the co-signer is responsible for the loan. If you miss a payment, the co-signer’s credit suffers.
PRIVATE FINANCING COMPANY
Some finance companies specialize in bad-credit loans. One problem with most of these companies is that dealing with them can be a nightmare. Good customer service isn’t even on their radar.
Another issue is that they charge exorbitant interest rates and the monthly payments are so high that it would be a struggle for some people to make them. Still, it is an option that those with bad credit can consider.
BUY HERE PAY HERE DEALERSHIP
Unlike traditional dealerships, a buy here pay here dealer doesn’t care about your credit score. Instead, they focus on your ability to pay going forward. This allows them to offer bad credit car loans to buyers who would be denied at a bank.
The reason it’s easier to get approved with in-house financing is that the seller and lender are the same. You don’t have to go back and forth between two organizations to get your loan approved. The BHPH dealership looks at your income and lets you know what kind of car you can afford. It’s that simple, and most loans are approved the same day.
So what are the criteria for BHPH loan approval?
As mentioned above, BHPH lenders don’t care about your credit score, past missed payments, or even bankruptcies and repossessions. They understand that bad things happen to good people and that most will have credit issues at some point.
The only criteria for most BHPH lenders are proof of address and proof of income. There is typically a minimum monthly income, but it’s usually low enough that most will easily meet the threshold.
Texas Auto Sales is a BHPH dealer and an excellent choice for anyone looking for car loans with bad credit in Texas. You can get started online by filling out the simple application or stop by to discuss your needs today.