Getting a loan from a dealer is often a more streamlined process as compared with private party auto loans, where you have to find the loan yourself and arrange all the specifics. But, the upside of getting car loans private party is that you can buy a used car of your choice which may not be available with the dealerships. Even with damaged credit, you can find private party car loans bad credit at reasonable interest rates and flexible payment plans.
As with any loan, before applying for private party auto loan, get a copy of your credit report. You can get one free copy of your credit report every year from all the three bureaus – TransUnion, Experian, and Equifax. Critically review the report to spot inaccuracies and dispute them. Fixing errors will improve your report. If there are any small outstanding debts or utility bills, pay them off. A cleaner report makes for a better case for approval and can even fetch you better interest rates.
Th next step is to locate lenders that can give you good deal on private party auto loans. Begin with contacting your bank that you regularly transact with. Ask for the applicable interest rates for a ballpark amount that you wish to spend. Check the car rates according to the make, model, and mileage to arrive at this ballpark figure. Do not forget to add costs related to loan origination, title, registration, insurance, maintenance, and fuel. It’s best to comparison shop with other providers such as credit unions and online lenders to locate a good deal.
Usually, banks have a minimum limit prescribed below which they do not offer car loans private party. They also lend only for cars under a certain prescribed age limit. Check with your bank if they have such criteria. Most private party auto loans are for a shorter duration, generally four years as compared with the dealership loans that last six years. However, remember that auto loans private party, in general, and private party car loans bad credit in particular, come at a higher interest rate when compared to dealership loans. If you are a member of a credit union, you may get competitive rates.
Once approved for private party auto loans, you will get a proof of approval from the lender which can be used to shop around and negotiate the best price of the car you wish to buy.