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$500 Down Payment As Deposit On Bad Credit Car Loan

A down payment on a car loan indicates to the lender that you are serious about paying for the loan. Most people feel that a reasonable down payment on a car loan is $500, others will offer $1000, $2000 or up to $3000 deposit depending on their financial situation, credit score and the requirements of the lender.

Whether you are buying a car in Kansas, Mo, North Mississippi, Orange County or Dallas, Texas putting a down payment on a car loan is advisable. A down payment lowers the principle on the loan and reduces you monthly payment, allowing you to pay off your loan on time, improve your credit score and avoid the possibility of an upside down loan.

In addition, some lenders and buy here pay here car dealers will reduce the interest rate on the loan when buyers are willing to put down a sizable deposit.

However, before you put down $500 on a new or used vehicle there are some documents you should look over first.

Check your credit report to see how bad your credit really is. About 79 percent of all credit reports has errors. If you discover errors on your credit report notify the companies involved to issue a correction. A few points difference in your credit score can result in hundreds, if not thousands of dollars in saving.

Make sure you have a current drivers license. Some dealers will sell cars without requiring a drivers license, but to be safe you should have one

Get your W2 and work history

If you are bringing someone to co-sign the loan remind them of the documents they will need, such as an SSN

If you are using your home as additional collateral or home equity line of credit, your mortgage document will be essential

Another option, is to let lenders compete for your business. By using auto loan application car dealers will negotiate for your business

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  • 750 - 800 Excellent Credit
  • 700 - 749 Good Credit
  • 650 - 699 Prime Score
  • 600 - 649 Poor Credit
  • 300 - 599 Bad Credit
  • 740 - 800 Super prime  car loan rates 
  • 700 - 739 Preferred  auto rates
  • 650 - 680 Prime car loan rates
  • 570 - 640 Sub-prime car loan
  • 500 - 560 Bad credit car loan  
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