The
good news is that there are alternatives, and you don't have to
survive without a vehicle, even if you can't get a loan. The bad news
is that most of these alternatives are worse than the terms of an
auto bad credit personal loan,
so they should be used as a last resort.
1. Use
Cash Savings
This
is no rocket science: if you have cash stashed aside for an
emergency, it's better to use it for the purchase of a car, than to
struggle with a loan that will just accumulate interest and drag you
deeper into debt. Even if this means you'll have to scale down and
you won't get the car of your dreams right away, if you have savings,
use them.
2. Get
a Loan from a Relative or Friend
There
are two ways a member of your family or a friend can help you out in
this situation: either by co-signing the auto loan with you, or by
lending you the money directly. In both instances, keep in mind that
you're placing a serious burden on a loved one, so make sure you
don't ask for too much, and repay the loan as quickly as possible.
3.
Take a Personal Loan
Even
if you don't qualify for an auto loan, you may still get a no credit check loan,
which has less restrictive conditions. The interest rates will be
higher, but at least it has the advantage that you can time it so
it's paid off by the time you want to get rid of this car and buy a
new one.
4. Use
Cash Value Life Insurance
If you
have a permanent life insurance policy, it carries a cash value, and
you can borrow money against it. Check with a consultant before
taking this step, since there are some taxes that have to be paid,
which vary from one state to another.
5. Use
Your Credit Cards with Caution
Credit
cards always carry high interest rates and steep penalties if you
fail to cover your debts from one month to another – not to mention
that they can cause serious damage to your credit score. Taking money
from credit cards to pay for a major purchase, such as a car, is a
very bad idea. Only use your cards if you need a very small amount,
and you're certain you can repay it before the debt cycle is over.
6. Use
a Credit Union Loan
If
you're a member of a credit union, ask for the financing options.
Usually the terms are far better than what you can get from a bank,
and this could save you a lot of money in the long run.
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credit unions do not give bad credit auto loans. If you have bad credit and need an auto loan, yes you will have to pay the high interest rate as you are a high risk to a lender, get over it.
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