For many people getting a loan with bad credit is easy, it’s working to afford the monthly payments that is the tough part!  Luckily, there are quite a few things that you can do before you ever apply for the loan that can save you loads of money, as well as refinancing options that are available later on to help even further.  In this post I want to cover some of these things so that you can save yourself a lot of cash now and later!

The first, and most obvious, step is to make sure that you actually have bad credit.  Tons of people have errors on their credit report of problems that aren’t actually theirs.  It’s your responsibility to manage your credit score, and if there are issues like this you have to be the one to correct them.  To do this, get a copy of your credit report and check it thoroughly for errors.  If there are some, contact the company that put it there and clear it up.  Once you do that, forward all of the paperwork onto the the credit reporting bureaus.

If you are getting a car loan with bad credit, the simplest thing you can do is increase your down payment.  A big increase in your down payment will give you a big decrease in your interest rate.  This is because less emphasis is put on your ability to get a loan since less money will need to be borrowed.  Lower interest rates often accompany smaller loans.

Having a cosigner is a risky way to reduce your interest rate.  The APR that you get on your loan is somewhere between your credit score and that of your cosigner.  The problem is that if you default on the loan, you are probably going to default on your relationship with the cosigner!  This situation never, ever ends well!

These three steps are some of the easiest ways to make a positive impact on your monthly loan payments.  As you are paying off your loan, and your credit score increases, you will have the opportunity to refinance it later on and save yourself even more cash!