If you don’t have access to great public transit, you need a car. The only catch is that cars are expensive. People who can afford them either have the cash saved up, good credit, or a little of both. Otherwise, options for purchasing a car can be seriously limited.

Buying a Car: Your Alternatives to Traditional Financing

Luckily, there are some additional options people don’t consider right away. By making the right financial moves, you can afford a car and start building better credit. 

Financial services like short term loans can give you access to cash without having to jump through nearly as many hoops as a traditional car loan. You can also find ways to get people you know and trust to help you boost your credit-worthiness.

If you’re struggling to afford a car and are wondering about what options you have available, then here are some of the following funding sources and financial strategies you might want to consider.

Seek Out Special Financing Programs

There are lots of special lending programs out there for specific categories of car buyers. Common special financing program targets include: students, recent graduates, military personnel, military families, and those who intend to use the vehicle mostly for work purposes.

Many of these programs downplay the importance of your credit score, giving you more favorable chances at getting a loan. They also may have relatively low promotional interest rates, special payment arrangements, or the ability to offer a low or no down payment.

Most special financing programs apply to new car financing. However, there are programs operated through a specialty auto loan provider, which would allow you to buy a used car.

When considering whether a special financing program is right for you, always make sure to weigh the promotional benefits against the full cost of the loan.

Talk to Your Local Credit Union

Credit unions work to help members save and get the financial services they need. Part of that mission includes extending loans to individuals who aren’t likely to get an offer from a traditional bank. 

Employees of the credit union can help you get your finances in order and start building better credit. Sometimes, they can also give access to financial services that are customized to meet your goals. For instance, some credit unions offer a “credit-builder” auto loan that is designed to help you build credit while paying for a vehicle at the same time. 

You must join a credit union to take advantage of these services. That can involve something as simple as opening up a saving’s account with a minimum balance (usually around $100 to $200). 

It’s probable that you’ll have to submit proof of income and other documentation before you are accepted into the credit union. The good news is that going through this process can help you take the first steps towards building better credit.

Find a Co-Signer

In theory, finding a co-signer for your auto loan is easy. You just need to know someone who has better credit. By signing the loan with you, they can increase your odds of approval and decrease your interest rates.

However, co-signing also means that the co-signer has to deal with the consequences of the loan if you somehow can’t pay it back. This will affect their credit rating, and it can even put them on the hook for your debt.

Because of this risk, it can be tough to find a co-signer who trusts you enough to put their name on the line. But if you pay the loan back on time, you can boost both your credit and theirs.

Get a Temporary Job with More Consistent Income

In today’s modern gig-based economy, it can be easy to make money but hard to prove your income. If you rely on things like poker winnings, rideshare fares, bartending tips, sales commissions, or the occasional contracting oddjob, it’s not unnatural to feel a sinking feeling in the pit of your stomach when asked to provide your income documentation.

While keeping better records can help, you may also have to find a more traditional job with a regular paycheck. This is important for creating a clear income paper trail.

With enough steady paychecks under your belt, you can prove your income more easily and often get access to better financing offers from banks and specialty lenders, even if you still have bad credit.

Save Up for a Down Payment

Having a decent down payment on hand can mean more than just getting a better financing rate. Sometimes, it can make all the difference in getting approved.

Try to save up as much as you can for a down payment before shopping around for an auto loan. Your initial down payment helps shorten the life of the loan and gives you access to better financing options than you would normally have.

Short Term Car Loans from Alternative Lenders

Short-term loans are seen as low risk by alternative lenders since the payback window is so quick. Many will work with you even if you have bad credit or minimal credit history. 

You will have to prove your income in most situations, but the upside is that you can get funds when you normally wouldn’t be able to. That can be especially important in a situation where you cannot afford to wait.

If you are interested in securing a short term loan to help you pay for a car or any other major purchase, Your Own Funding can help. We help you track down a short term loan that works for you and that is as convenient to pay back as possible. 

Get started looking at your alternative lending options when you apply for a personal loan today.

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