Anytime you look online for tips on buying or financing a car, the articles you see oftentimes focus on how to find the lowest interest rates. These articles are catered to people with good-to-excellent credit. But what happens if your credit isn’t so good?

If you’ve had credit challenges in the past then you are going to pay a higher interest rate than most other people, that’s just how it is and there is no getting around it (unless you spend years rebuilding your credit before you buy a car). I have had people sit right across from me and tell me that they are not going to pay 29.99% interest on a car loan, and I completely understand where they’re coming from, I wouldn’t want to pay that much either. The truth is, I have had to pay high interest rates like that multiple times. The first time was when I had absolutely no credit and the second time was when my credit was destroyed. Both times the only banks that would take a chance on me were banks offering 29.99% interest. 


Many people see these high interest rates and think that it’s the dealership who is just ripping them off. I can tell you right now that it’s not our fault, we are at the mercy of the banks we deal with. Oftentimes we have to pay them in order to get your approval processed. What can you do if you’ve got challenged credit but need a car? What is the most fiscally responsible way to go through the car-buying process? For starters, see if you’ve got a trusted relative or friend who will cosign for you. A cosigner who has decent credit is a great way to get a lower rate. 


If you have no way of getting a lower rate with a cosigner then you’ll need to be smart about your decision. Remember that this isn’t going to be your dream car and any decent car that will last a few years will do the trick as this is just a temporary fix while you build your credit back up. A loan at 29.99% interest will likely be for about 4 years. You should look at this as a 2-year loan. What I mean by that is you should plan on paying double every month to pay off this high interest loan much faster. Paying double on a 29.99% loan means you’re only going to end up paying 14.98% interest. 


Remember, YOU are in control, not the bank. You are in control of how quickly your loan gets paid off. The longer you take to pay it off, the more in interest you will end up paying. Also think of this high-interest loan as a test. If you can pass this test then the next time you need help from another bank or finance company they will trust you more. More trust means a smaller interest rate. So use these high-interest loans to your advantage to rebuild your credit and gain more trust with other lenders for your next car when the time comes.