Low Credit Financing in San Antonio, TX

Buying a car can be an exciting experience, but you may find it difficult to get an auto loan if you have an unfavorable credit score. If you’re trying to purchase a vehicle with bad credit in San Antonio, Texas, consider coming to Red McCombs Toyota. Our finance center can help you find and secure a bad credit loan to fund your car purchase, thanks to our solid relationship with many leading banks, financial institutions, and credit unions nationwide. Check out the following questions and answers to learn more about low or bad credit financing.

Why Is It Difficult To Get Auto Loans With Bad Credit?

One of the main factors influencing your car loan application decision is your credit rating. Your credit score indicates your ability to fulfill your loan responsibilities by making payments on time. If you have had a considerable number of late or missed loan or credit card payments in the past, you’ll probably have a low credit score. Even though bad credit doesn’t necessarily mean that you’ll have issues repaying your next auto loan, it makes you a high-risk borrower and causes lenders to think twice about offering you a loan.

If you have a bad credit history, you’ll likely be rejected for an auto loan if you apply with a major bank, which typically has stricter credit requirements. What you can do instead is to try to obtain a car loan through a third-party lender, such as an auto dealership. Nevertheless, it’s essential to note that bad credit car loans generally have higher interest rates than traditional ones.

Does Red McCombs Toyota Offer Bad Credit Auto Loans?

At Red McCombs Toyota, we believe that everybody deserves a second chance when it comes to auto financing. As such, we go above and beyond to help people with low credit, bankruptcies, foreclosures, or other unfavorable financial circumstances secure the auto loans they need to buy their desired vehicles.

Over the years, our finance center has established partnerships with many top subprime lenders that can extend credit to applicants with past credit problems. These lenders provide exclusive auto loan packages to individuals who may not be approved for a loan with conventional banks and financial institutions. When you purchase a vehicle from us, we’ll try our best to tailor a car loan package to perfectly match your budget and lifestyle.

What Are the Requirements for Bad Credit Auto Loans?

Other than your credit score, auto loan providers also look at different aspects of your financial life to determine your ability to make your loan payments. If you’ve been paying your rent or utility bills on time and have a stable job, you’ll stand a reasonably good chance of being approved for a loan, even if you have a low credit score. Below is a list of standard criteria for bad credit auto finance:

  • Proof of identity, such as a driver’s license or passport.
  • Proof of residence, such as your residential utility bill or any similar statement.
  • Proof of income and banking history, including pay stubs, bank statements, and W-2s.
  • Trade-in information, if applicable.
  • Proof of insurance.

Do I Need To Make a Down Payment for a Bad Credit Auto Loan?

When applying for auto financing, you’re usually required to make a down payment. Besides helping you secure a car loan, a down payment also offers several other benefits, including lower monthly payments, a better interest rate, and a reduced risk of being underwater. Regardless of whether your credit score is good or bad, putting down a larger amount will always work to your advantage.

Your down payment can significantly impact your chances of getting an auto loan if you have a low credit score. This is because it can reduce your loan-to-value (LTV) ratio, which is a number that lenders use to assess your risk as a borrower. In the case of a car loan, your LTV is the ratio between the loan amount and the vehicle’s value. So, the lower your LTV, the more likely you’ll get approved for a loan.

By making a significant down payment, you’ll also show your lender that you’re willing to put a large amount of money on the line, which means that you’re determined to own a car. So, if you have bad credit, you can increase your loan approval chances by leveraging your down payment.

Do I Need a Cosigner To Get a Bad Credit Auto Loan?

In most cases, a cosigner with an excellent credit score can greatly improve your odds of qualifying for an auto loan and your loan terms. A cosigner is somebody who agrees to accept the legal obligations that come with your car loan if you’re unable to keep up with your payments. Having a cosigner is a way to assure your lender that the debt will be paid back, making you a less risky borrower.

Can a Bad Credit Auto Loan Help Improve My Credit?

This depends on whether you can make on-time payments consistently. One advantage of getting a new auto loan is that it can help improve your credit mix, which accounts for 10% of your credit score. As you continue to punctually pay your car loan every month, you’ll show your willingness and ability to meet your loan responsibilities, which can improve in your credit score.

Get a Bad Credit Loan From Red McCombs Toyota Today

If you’re trying to obtain a bad credit auto loan in San Antonio, Texas, there’s no better place to go than Red McCombs Toyota. Over the years, we’ve helped numerous drivers with less-than-stellar credit get the financing they need to purchase their dream rides. With our extensive lending network and highly experienced finance experts, we can get you approved for bad credit financing with minimal hassle. Of course, we’ll also shop around to ensure you’ll get the best possible interest rate. Don’t hesitate to contact us if you need more information about our bad credit auto loans.