back to articles | December 31, 2018 | Dale Peterson

Categories: Types of Car Loans

Second Chance Auto Loan

Everyone deserves a second chance!

Do you wonder how to get an auto loan when you know your credit history is second or third tier? Are you afraid of walking into a dealership because you know your credit history will end up getting you turned down for a loan? You don't have to be concerned any longer. There're many different auto loans for people who need a second chance.

What is a Second Chance Auto Loan?

Second chance auto loans do just that; give you a second chance to prove yourself. People end up with bad credit for all sorts of reasons. Second chance auto loans give you a chance to redeem yourself and improve your credit. Don't be fooled though, most second chance auto loans have very tough stipulations. Many have higher auto loan interest rates and lower auto loan terms.

How do I Prepare for a Second Chance Auto Loan

Before you begin searching for a second chance auto loan, do your homework. Begin by obtaining a copy of your personal credit history. All three major credit reporting agencies allow you to request a copy of your credit history online.

Sometimes, your credit might not be as bad as you think. Spend time trying to repair your bad credit: make your payments on time for 6 months, pay off any large credit cards if possible, then call old creditors and request they remove you from credit reporting early.

Review your credit report thoroughly. Challenge incorrect information by disputing it through the credit reporting agency. Write explanations to be included in your credit report about your specific situation. Don't apply for a second chance auto loan until you have done all you can to repair your credit.

What Companies offer Second Chance Auto Loans?

Research auto loan companies online. Most online lending companies deal with consumers who have difficult credit histories. Look for companies specifically advertising they offer second chance auto loans. Try to stay away from auto loan sites that refer you back to a dealership. They don't often deal with second chance auto loan applicants.

Look for mid-sized auto loan companies. They're hungry for your business and are more apt to take a chance on someone with bad credit.

Just remember; where there's a will, there's a way. A great way to clean up your credit history is to get a second chance auto loan. Make your auto loan payments on time every month and you'll be surprised how quickly you can turn your credit around!