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Bad Credit Car Loan: Eligibility Criteria
By: Richard Bulla

A bad credit car loan is a specific loan that can be availed by people who have bad credit score. However, there are certain eligibility criteria that you need to meet in order to qualify for the same. The interest rate, the repayment period, and the terms and conditions will all depend upon these specific qualifying criteria. Lets have a look into the same.

Employment proof

Since you have a bad credit score, by offering a loan to you, the lenders are actually risking their money by offering you a bad credit car loan. In order to ensure the repayment, most of the lenders will require you to submit a proof for your current employment. A valid evidence of your present employment must tell the lenders regarding the amount of your monthly income, the period of employment so far, etc. You can use the appointment letter as the evidence of your current employment. Along with that, you are also supposed to submit the salary slips for the last 3 to 6 months, as a proof of your monthly income.

Residential Proof

Another important document that you need to submit while you are applying for a bad credit car loan is the residential proof. You need to submit a document that certifies your current and permanent residential address.

Down Payment

Down payment is perhaps the most important element in this regard. The amount of the down payment determines the rate of interest and other terms of financing. First, it is important for you to understand that making down payment is a must. It means, no lender will be ready to offer you a loan if you are not willing to pay a certain amount as down payment. It is just that how much you are willing to pay. The amount you pay as down payment is adversely proportional to the interest rate. It means, if you are willing to pay a higher amount as down payment, you can easily convince the lenders to offer you a much lower rate of interest. The higher amount of down payment works as a security of the repayment of the loan.

Your Current Monthly Income

Your current monthly income also plays a very important role in getting the loan approved to you. The greater the amount of your monthly income, the brighter are the chances of your getting the best bad credit car loan. Even if you have a bad credit score, but if you are able to make a higher down payment and your salary slips also shows a greater monthly income, you can easily find a lender that will offer you the most competitive rate.

Overall, we can see that the key to finding the best deal in bad credit car loan lies in your ability to convince the lenders about the repayment of the loan amount. You can do this all the documents properly.