Top 10 Must-Remember Tips for Securing Bad Credit Car Loan
Written by Phillip Gruppelaar
When you have had past credit problems, obtaining suitable finance approval for your next car can be very difficult.
Regardless of how bad your past problems are, here are some useful tips to help your chances.
1. Use a Finance Broker – More than 90% of all financiers using computerised approval systems. A broker who specialises in bad credit knows where your best chances are.
2. Be honest – Any financier is going to look deeply into your credit past, if you leave things out or you make things up. You will get caught out and your loan will be declined.
3. Be organised – When presenting a bad credit application, a good finance broker will need to prepare your case for approval. Financiers want a lot more paperwork. Your best chance of success is to supply everything the broker asks for in advance.
4. Make sure you can afford it – All lenders legally have to confirm your ability to repay the loan. There are minimums they must allow for expenses, children. If you don’t fit this expense model you will be declined.
5. Centre-link Payments – Generally Family Tax Benefit A & B are only considered for income purposes.
6. Stay away from “Pay day Lenders” – Any pay-day lending within 3 months of any bad credit car loan application will kill your application. Pay day lending says “I can’t afford to live week to week” so nobody is going to lend you money that will add to your problems.
7. Be Realistic about the vehicle you choose – Remember you are trying to get back into the financing arena. As an example an application for $50,000 will look stupid if you have no savings. How is a financier meant to believe you can make additional payments in excess of $1,000 per month?
8. Casual or Probation Employment – Casual employment less than 6 months or you are on probation virtually kills your chances of approval, don’t make applications while you are in these situations.
9. Multiple Applications – The more applications you make the less chance you have of success. Especially your chances of the lowest interest rate available for you.
10. Buy from a Dealer – Private sales are seldom approved for people with bad credit.
If you are not sure if you can get a loan approved speak to a specialist bad credit car finance broker.