4 Ways to Finance Your New Sports Car When You Have Bad Credit
Tuesday, June 13, 2017, 6:00 PM | Leave Comment
A fancy new sports car may make you look and feel like a million dollars.
However, the car is also likely to cost what feels like a million dollars.
Therefore, you may have to borrow money to afford the purchase.
What are your options if you have bad credit?
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Get Someone to Cosign the Loan
A cosigner is someone who pledges to pay the remaining balance on a loan if you are unable to.
It is important to understand that the loan will impact the cosigner’s credit in the same way that it impacts yours.
If you miss a payment, the missed payment will likely appear on the cosigner’s credit report as well.
Therefore, it is important that you make the payments to avoid risking your relationship with this person.
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Secure the Loan with Collateral
Another effective way to get a loan with bad credit is to secure it with collateral.
Technically, you will be securing the loan with additional collateral as the car can be repossessed if payments aren’t made on time.
Collateral may be anything of value such as shares of stock, an antique art collection or anything else a lender may be willing to accept.
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Work with a Bad Credit Lender
A bad credit lender actively seeks out and works with those who wouldn’t otherwise qualify for a car loan.
Some companies, like BlueSky Auto Finance, know how frustrating this situation can be.
It may also be possible to refinance the loan if your credit score improves over time.
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Take a Home Equity Loan or Line of Credit
Home equity loans or lines of credit allow you to tap into the value of your home to pay bills or fund purchases at a low interest rate.
Depending on your income and other variables, a lender may overlook your bad credit and approve the loan.
However, it is important to note that you could lose your house if you fail to repay a second mortgage.
Having bad credit doesn’t mean that you can’t get the money that you need to finance your new car purchase. What it does mean is that you may need to get creative when it comes to finding a funding source.
No matter how you get the loan, make sure that you can afford the car that you buy. Otherwise, you could further ruin your credit and lose the vehicle to repossession.
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Rachelle Wilber is a freelance writer living in the San Diego, California area. She graduated from San Diego State University with her Bachelor’s Degree in Journalism and Media Studies. She tries to find an interest in all topics and themes, which prompts her writing. When she isn’t on her porch writing in the sun, you can find her shopping, at the beach, or at the gym. Follow her on twitter and Facebook.
