Let’s say you made late payments or have some of your credit cards maxed-out. That happens. Consumer debt levels have risen greatly during the past years, so you are not the only one who has this problem. Getting a car loan with bad credit is not impossible. It might be challenging, but you have a chance. There are some tips you can follow to get a car loan if you have problems with your credit file.
Apply with lenders that do not perform a credit check. There’s only a few of them on Australian market, but they do exist and they can help in a situation like yours. These kinds of loans are usually the most costly with high interest rates and early termination fees. Probably you are also not going to be able to choose any vehicle you want and will end up paying much more for a car. However, there are some advantages too: you can get a fast approval (usually within 24 hours), fixed repayments and independent advice. A no credit check loan is not the best deal, but it can show to future lenders that you are a reliable customer in terms of repaying the debt.
Consider loans that require a good deposit, if you have any savings on your account. This will minimize the risk for the lender and they will be more inclined to give you a loan. You might save on the interest rate as well. You should also finance the loan within 2 or 3 years instead of a longer-term period if you can afford the higher monthly payments.
Show your potential lender a good employment history and source of income. Having a solid stable income will reflect well on your application. You need to demonstrate a reasonable long relationship with the employer. You also need to show that you have funds deposited to your bank account on a regular basis. Even little savings can play a big role.
Shop within your price range. Even if you qualify for $22000 car doesn’t mean that you should get it. Choosing the one for $17000 will save you $100 on monthly payments. If you have poor credit, it’s important to be realistic about a car you wish to get. Opting for expensive vehicles that are out of your financial possibility is going to make obtaining a loan much harder. So, think practical and you will have a better chance of getting a car loan. Later on once your credit rating and financial situation improve, you can get that dream car.
Remember, bad credit doesn’t stay bad forever. You should look at it as on the temporary problem. If you have a consistent history of making payments, the situation can get a whole lot better in only 6 months.