If you have bad credit, it is not impossible to get a car loan anymore. In fact, there are plenty of alternative lenders and bad credit auto loans to choose from. It helps to know what your credit score is before you get started, but you can still try for most of the loans and programs out there. As you go along applying for a loan with these lenders, here are a few things you should know to help you set realistic expectations. 

Very High Interest Rates

Most people with bad credit should expect the interest rates on these kinds of loans to be particularly high. The lenders are taking great risks with providing bad credit loans, and therefore they are protecting themselves against a default. You are taking a risk as well because this means higher payments for you, and any missed payments are reported to the credit bureaus. 

Some Longer Repayment Terms, Some Shorter Repayment Terms

Some of these car loans will offer longer repayment terms of up to six years. That is very helpful if you need to stretch out your payments, pay a little less, and then begin paying more later on. Some loans offer shorter repayment terms, but these loans often expect customers to pay double the monthly amounts customers might otherwise pay. Be sure to shop around, and do not accept the first bad credit auto loan offer you receive. Check the repayment terms to see if you can financially manage what they are requesting and expecting of/from you. 

References, References, References

Applying for a bad credit loan often requires credit references. Some lenders will ask for three references, with telephone numbers and addresses, before they will allow you to sign the loan documents. Others may ask for ten references, and this is often a means for the lender to drum up business while simultaneously affirming that you can manage the amount of debt you are requesting. If you want to know what the reference requests are for, you are within your right to ask. The lender does have to tell you what the references are for and whether or not your references will be contacted in regard to your loan application. 

Requests for Auto-Withdrawal Payments

Some bad credit lenders will only allow you to take out an auto loan with them if you are willing to set up auto-withdrawal payments from your checking account. They have to verify that you have a checking account and that it is active and actively receiving money from at least one source. If you are not comfortable with these requirements, you may want to keep looking for another lender. 

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