How to Buy a New Car With a High Interest Rate

If you're in the market for a new car but you aren't blessed with a great credit rating, you might only be eligible for a loan with a high interest rate. However, a high interest rate isn't as bad as it seems. In fact, you might end up digging yourself deeper in the hole by trying to figure out a way around the rate. The best thing to do is deal with it.

Instructions

1

Don't shop around. Whatever you do, do not look for a lower interest rate. If you have bad credit, chances are you aren't going to find a low interest rate anyway. Do you really want to mess up your credit even more by searching on end for an interest rate that's only lower by a few decimal points? The problem with shopping around is that when you apply to various lenders, you get a mark on your credit each time you apply. The more marks you have, the more it will drag down your credit. So it's better to stick with the first offer and work on building your credit up from there. If you continue shopping around, it will likely drive your interest rate up even higher than if you would have stuck with the original in the first place.

2

Don't attempt to repair your credit. It's also not a good idea to go to places that attempt to fix your credit because you will likely pay a lot of fees and will still end up having to pay a high interest rate. You also don't need to pay money to a company to remove something from your credit report that isn't supposed to be there. You can have it removed yourself for free. Also, don't trust in companies that offer quick credit fixes because that blemish on your credit report can't be removed for at least 7 to 10 years. Credit repair takes time, so if the company is urging you to falsify information on the application, you can guarantee they are scam artists.

3

Know the facts about higher interest rates. It's not necessarily bad to have a loan with a high interest rate. As long as you are making the payments on time each month, it will raise your score. Your payment information is routinely reported to the credit bureau each month so your credit rating improves automatically. An improved credit score will help open the doors for you later to lower interest rates. So don't look at a high interest rate as a monster, look at is as an opportunity.

4

Eliminate unnecessary expenses. In order to make the high interest rate more affordable, you should eliminate any unnecessary expenses from your monthly budget. Trips to the day spa and nail salons are no longer important in comparison to owning a brand new car, huh? Suddenly you find it easy to cut out trips to the mall, concerts, clubbing and fine dining. All of these things you couldn't live without before are a lot less significant when they come between you and your mode of transportation.