So you want to get a car loan, but just discovered that you have bad credit. While this can be a problem in Sweden, all is not lost. People presume that having bad credit automatically makes it more difficult to get a car loan, and in the event that they’re able to get one, they also think that it would cost them more. However, there are actually several ways for you to get bad credit car loans without having to break the bank.

Manage your expectations

Admittedly, while there are ways to keep your costs down even with bad credit (which we’ll detail below), you have to accept that you won’t be able to qualify for the best and most attractive loans. This means you have to be sensible about the car that you’re going to get a loan for. Expensive cars like Audis and Mercedes-Benzes would make your loan application significantly more difficult, so stick to practical and more affordable choices.

Research, then research some more

There’s no getting around this one: you still have to do your research; perhaps at a significantly greater degree than your average loan because a traditional institution like a Swedish bank or credit union won’t be willing to lend you any money. You need to dig deep for sub-prime and online lenders who actually focus on offering loans to people with no credit or bad credit. You can use the help of financial portals, such as https://www.billan24.se/, to find the lenders who are offering bad credit car loans in Sweden.

Go for a secured loan

A secured loan is a type of loan where you put up an asset (usually the vehicle you want to purchase) as guarantee for the loan in case you default on the loan. Secured loans are a way for lenders to mitigate risk. If the borrower is unable to pay, the lender takes possession of the collateral and sells it to recoup part or the entire loan amount. Since secured loans minimize the lender’s risk, interest rates are relatively lower and more manageable than those of unsecured ones.

Get a co-signer

Another way to improve the chances of having your car loan approved is by getting a co-signer, who assumes joint liability with the borrower. If the borrower fails to pay, the co-signer will take on the responsibility of settling the debt. In secured loans, the co-signer is usually responsible for the part of the debt that the collateral doesn’t cover. Since having a co-signer also minimizes the lender’s risk, the loan’s interest is also made somewhat lower.

Save for your down payment

You’ve probably seen some lenders offer a “no money down” promo, which lets borrowers get a loan without giving a down payment. However, it’s still more advisable to save enough cash for you to afford at least 10 percent of the loan amount as down payment. Doing so will reduce your monthly payments, bring down your loan-to-value ratio, decrease the lender’s risk, and lower the chance of defaulting. This will provide you better terms and interest rates.