If you read yesterday’s blog post, you’ll know the initial steps you need to take to get a Kitchener car loan with bad credit. Today we’ll continue the story by outlining the need to set a budget and getting preapproved.
By the end of this post, you’ll know all you need to be able to apply for a Kitchener car loan with bad credit!
Setting a Budget for A Kitchener Car Loan with Bad Credit
Setting a budget is essential for being approved for a Kitchener car loan with bad credit and being able to repay it. The main reason for setting a budget is to ensure you don’t overspend on the car and can comfortably manage repayments.
If you followed the steps in the previous post, you’ll already know your credit score and will have set the wheels in motion to have any errors you found corrected.
Now it’s time to put together a spending limit for a car.
Create a simple budget spreadsheet that includes all your income and your outgoings. Use it to assess how much you have left each month. Use this figure to come up with a sustainable car loan repayment amount.
Don’t forget to factor in running costs, gas, insurance and all the other expenses that come with running a car.
Use a car loan calculator to see how much you could afford to borrow. Play around with the figures until you have an amount you could comfortably afford over the term.
Add this amount to your trade in and/or down payment to come up with an approximate figure of how much you could afford to pay for a car.
Next, we need to check our math.
Get car loan preapproval
Car loan preapproval is a dry run of your loan application. It’s a test to see if someone in your situation with your credit score could borrow the amount you want to borrow.
It is a very useful tool in setting your expectations and your budget. We recommend doing this long before you begin looking for the car as it will influence what you can get. Do this before you fall in love with a car or set your heart on a particular make or model and your journey will be all the easier for it!
Once you arrive at a figure you could likely get approval for, add it to the amount you can raise from your trade in and/or down payment.
This is a more accurate figure of what you can spend on a car.
You can use this figure going forward to research cars in your price range, check out dealerships and begin shopping and researching in earnest.
Then, when you’re ready to apply for your bad credit car loan in Kitchener, come see us for a competitive loan!
For those of you who know that you have a challenging credit situation, please visit Dixie Auto Loans where we have a team of credit specialists ready to help you get approved for a car loan today!