How can I get a lower interest rate for my car loan?

Is there a way to get a low-interest rate on a car loan if you have bad credit? My credit is terrible, and my old car just kicked the bucket. I need another car, but I don't have enough cash saved up to buy one yet.

Answer
Cars tend to stop working at precisely the wrong time! It can be hard to secure a low-interest loan if you don’t have good credit, but there are some things you can look into that may help.
The first step to take is to get an updated copy of your credit report. Do you see any inaccurate information? If you do, do what you can to have any erroneous information removed. It can take up to 30 days for the update to hit the credit report and, understandably, you may need a car before then. Still dispute the information but move on to another solution while you await the outcome.
Make sure to shop around for a car with the lowest price possible. You may qualify for a loan with lower interest if you can put together a large downpayment. If you can swing a higher monthly payment, ask if the interest will be lower if you reduce the repayment term for the loan.
Get in touch with a local dealership. Many dealers have a good relationship with banks in town, and you may qualify for a loan through the dealer instead of a standard bank. The terms and conditions of dealer loans can be hit or miss, so read the fine print and ask about penalties for late payments.
Lastly, see if there is anyone who can co-sign a loan with you. This may be the best chance you have to secure a loan with a low-interest rate. It usually isn’t good to mix money with friends and family members, so whoever can do the loan with you, have an open and honest conversation about your finances and their expectations.
Once you get a loan for your car, make sure to keep saving money by getting a great deal on car insurance. The folks at Jerry can help! Jerry shops for low rates with over 50 insurance companies, so you can find the policy you want at the best price.
Good luck getting your new wheels!
Shannon Martin
Answered on Nov 05, 2021
Shannon is an expert in personal lines liability insurance with 13 + years of insurance industry experience. She also served as a special insurance liaison to AARP members for 6 of those years. She is a graduate of UL Lafayette and currently resides in NY with her family. Shannon is also an amateur juggler, ukulele player, and is a time travel paradox theory enthusiast.
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